Bitcoin and U.S. Bond Yield: A True Love Story
When investors were fearful of the growing inflation they were looking for an asset to hedge against this madness. They used to buy gold back in the days, but recently they found Bitcoin, which has many advantages compared to metal. So as we know, whenever investors lose confidence in the market they drop bonds driving the US10Y up, but they seem to buy bitcoin instead.
It appears that investors are predicting the market by moving their funds in and out of the big crypto, which might explain the delay between these charts (white arrow). As you may notice, US10Y seems to be a few days behind BTC. Although, these charts are out of sync, they proportional. It looks like for every 3 points movement in Bitcoin, US10Y moves 1 point (See the blue arrows).
When Bitcoin broke below its trendline on May 11th it dropped nearly 33%, while US10Y broke below its trendline on June 8th and dropped around 11%, hence the delay and proportionality.
But considering the death cross and the massive head and shoulder that are about to complete on the BTC chart, Bitcoin may not be done dropping:
So if it drops another 48%, US10Y should also drop but as much as 16%. Although, we are already anticipating a drop in the yield considering the CPI report released on June 10th:
What does it all mean? It means:
Please share your thoughts and theories in the comment section below.
It appears that investors are predicting the market by moving their funds in and out of the big crypto, which might explain the delay between these charts (white arrow). As you may notice, US10Y seems to be a few days behind BTC. Although, these charts are out of sync, they proportional. It looks like for every 3 points movement in Bitcoin, US10Y moves 1 point (See the blue arrows).
When Bitcoin broke below its trendline on May 11th it dropped nearly 33%, while US10Y broke below its trendline on June 8th and dropped around 11%, hence the delay and proportionality.
But considering the death cross and the massive head and shoulder that are about to complete on the BTC chart, Bitcoin may not be done dropping:
So if it drops another 48%, US10Y should also drop but as much as 16%. Although, we are already anticipating a drop in the yield considering the CPI report released on June 10th:
What does it all mean? It means:
- Money tunnels out of Bitcoin into Bonds and vice versa
- Yields react to the previous point.
- Lower Yields should result in the following scenarios:
1-Apes are going to have another run
2-The growth market should gain momentum
3-The speculative stocks should go up.
Please share your thoughts and theories in the comment section below.
Comment:
*Yields react to Bonds and vice versa (nothing new!)
