Bitcoin is facing renewed selling pressure as a sharp rise in US Treasury yields reshapes investor expectations for Federal Reserve policy. The yield on the two-year Treasury note climbed to 4.05%, its highest level in 12 months, driven by stronger-than-expected inflation data for April. This move has significantly increased the opportunity cost of holding non-yielding assets like Bitcoin, diminishing their attractiveness relative to government bonds.
Market participants had previously priced in at least two interest rate cuts by the end of the year, but those bets have reversed dramatically. CME Group’s FedWatch tool shows the probability of a rate hike in December surged from 22.5% to 44% in just one week, highlighting a hawkish pivot in sentiment. Bitcoin is now trading around $81,000, below its 200-day moving average of approximately $82,000, a technical level that analysts say is capping short-term upside.
Commerzbank analysts noted a similar dynamic in gold markets, where higher real yields have limited the precious metal’s gains despite strong central bank buying. For Bitcoin, the macro backdrop suggests that unless bond yields retreat or the Fed signals a clear dovish turn, institutional demand could remain subdued. However, some experts argue that long-term investors may view these macroeconomic fluctuations as accumulation opportunities.
