US 10-Year Treasury Signals Bitcoin Rally

A pattern in U.S. 10-year Treasury yields is drawing parallels to a Bitcoin accumulation phase seen in mid-2024, potentially signaling a new upswing, according to CoinDesk analyst Omkar Godbole.

The yield has largely traded sideways for the past two years, but appears poised for a significant break. Godbole noted that the current yield profile resembles the period leading up to Bitcoin’s (BTC) accumulation last summer and suggests a fresh wave of gains.

While Treasury yields remain below the MACD indicator, which has been producing “bearish signals” since late 2023, they are holding support at the 4% level. This level corresponds to the 23.6% Fibonacci retracement of a long-term downtrend that ended in 2020-2021. The sustained support, despite investor expectations of further rate cuts, points to an underlying bullish structure.

Based on technical analysis, the 10-year yield exhibits a strong upward sequence not seen since the 1950s, with the 50-, 100-, and 200-month moving averages aligned. The Ichimoku Cloud indicator also suggests that the yield is trading above the cloud, indicating a long-term upward trend.

This technical outlook suggests a possibility of the 10-year yield exceeding its 2023 high of 5.02% and reaching 6.25%. Such a move could pressure risk-on assets like cryptocurrencies and equities, as it implies a rise in “risk-free” returns.

Godbole pointed out that the technical alignment mirrors a scenario in mid-2024 when Bitcoin maintained stability between $55,000 and $70,000 despite weekly negative MACD signals. The subsequent shift to positive MACD in October spurred a rally above $100,000.

The analyst believes that a similar narrative could unfold. If this pattern repeats, a gradual but sharp upward trend in the 10-year U.S. Treasury yield could be seen until 2026.

Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility.