Bitcoin has surged by 11% in the past week, nearing its highest levels since July, but macroeconomic factors could pose challenges for the cryptocurrency’s momentum, according to analysts.
Yuya Hasegawa, a crypto market analyst at Bitbank in Japan, has expressed concerns about the impact of rising U.S. bond yields on Bitcoin’s price trajectory. “Rising bond yields are a bit of a concern for Bitcoin looking ahead,” Hasegawa noted. Elevated bond yields can attract investors to move funds from riskier assets like Bitcoin to safer investments, such as U.S. Treasury notes.
Currently, the yield on 10-year U.S. Treasury notes remains between 4.02% and 4.08%, down slightly from September’s peak of 4.3%, yet still appealing enough to draw capital away from risk assets.
Hasegawa also highlighted the risk of the U.S. Federal Reserve potentially slowing its pace of interest rate cuts. Strong retail sales and declining jobless claims suggest that the Fed might not be as quick to lower rates. Nevertheless, there’s still a “reasonable chance” that the Federal Open Market Committee (FOMC) could implement a 25 basis points cut in November, according to Hasegawa.
Additionally, the European Central Bank’s recent rate cut of 25 basis points could positively impact Bitcoin by increasing liquidity across markets. BRN analyst Valentin Fournier stated, “The combination of strong ETF inflows and macroeconomic catalysts points to an imminent breakout,” potentially pushing Bitcoin to test the $70,000 mark in the near term.