Bitcoin (BTC) trades around $66,000 during Asian trading hours on Tuesday, trading with losses as traders digest a rebound in U.S. Treasury yields and the possibility that the Fed will delay interest rate cuts until later this year. It was done.
At the time of writing, Ethereum (ETH) was trading above $3,300, while CoinDesk 20 (CD20) was down 0.6% at $2,532.
Sustained inflation and unexpectedly strong manufacturing activity pushed the 10-year Treasury yield to a two-week high of 4.40% overnight. Rising so-called risk-free interest rates typically encourage capital outflows from risky assets and zero-yield investments such as gold. But the yellow metal remained resilient even as Bitcoin and the Nasdaq, Wall Street's tech-heavy index, weakened.
“Bitcoin has fallen to $65,000, primarily due to the recent macro outlook on interest rates and rising U.S. Treasury yields,” Semir Gavezic, director of capital formation at Pythagoras Investments, said in an email interview. ” he said. “Higher interest rate environments typically tend to reduce investors' risk appetite.”
In Polymarket, bettors are ruling out the possibility of a rate cut by May, and opinions are evenly split on whether there will be a rate cut in June. Most of the solid funding is going toward what happens in the fall.
According to the CME Fed Watch tool, there is a 97% chance that interest rates will remain unchanged after the May meeting.
According to data from Coinglass, over $245 million of long positions were liquidated and $60 million of BTC positions were recovered in the past 24 hours.
“Perpetual futures funding rates for most crypto assets have returned to 1bps, global futures open interest has fallen by 10% overnight, and leveraged long positions have declined,” said Junyoung Heo, a derivatives trader at Singapore-based Presto. This indicates that some of the payments have been made.”
“Recent Bitcoin ETF inflows have stalled, with BTC and ETH market prices below their 20-day moving averages, leading some trend followers to view yesterday's decline as the end of a two-month bull market. It would be,” he continued.
