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The correlation between Bitcoin and Treasury yields sees a sharp decline
Alex Dovbnja
Bitcoin is on track to experience increased volatility due to upcoming macro data
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According to the data provided According to Barchart, the correlation between Bitcoin (BTC) and the 10-year Treasury yield has fallen to one of its most negative values in 14 years.
Earlier this week, the correlation dropped to minus 53.
The Treasury yield is how much investors can earn when they buy U.S. government bonds.
Bond strategists expect Treasury yields to stabilize for the foreseeable future and decline slightly later this year.
The 10-year U.S. Treasury yield has fallen this year as investors expect the U.S. Federal Reserve to implement multiple rate cuts. However, it later recovered thanks to stronger-than-expected economic data and persistently high inflation.
It is currently unclear whether or not the Fed will opt for two or just one rate cuts this year. That said, there is still a possibility that there will be no rate cuts in 2024.
As reported by U.Today, the price of Bitcoin fell to the $66,000 level on Tuesday, after Bitcoin Exchange Traded Funds (ETFs) ended their 19-day streak of inflows. Despite seeing high inflows last week, the leading cryptocurrency failed to break above the $72,000 mark on Tuesday due to stronger-than-expected employment data.
The leading cryptocurrency is expected to experience another bout of volatility this Wednesday due to the upcoming Consumer Price Index (CPI) report. Furthermore, the Fed is on track to announce its interest rate decision.
Lower funding costs would be beneficial for risky assets like Bitcoin.
About the author
Alex Dovbnja
Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience covering everything related to the burgeoning industry, from price analysis to Blockchain disruption. Alex has authored more than 1,000 stories for U.Today, CryptoComes, and other fintech media. He is particularly interested in regulatory trends around the world that are shaping the future of digital assets; he can be contacted at alex.dovbnya@u.today.