Bitcoin $24K Breakout Elusive as Treasury Yields Balk at Peak Inflation Narrative

Traders of risk assets, including bitcoin, might be wrong to conclude that inflation in the U.S. has peaked, the bond market activity suggests.

AccessTimeIconAug 12, 2022 at 12:42 p.m. UTC
Updated May 11, 2023 at 6:44 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Traders looking for an explanation for bitcoin's (BTC) latest failure to stay above $24,000 may want to look at what the bond market is saying.

The yield on the U.S. 10-year Treasury note rose to a three-week high of 2.90% early today, extending the recovery from the low of 2.67% hit after Wednesday’s inflation data. The two-year yield held steady at around 3.20%, having put in a low of 3.08% on Wednesday, per data sourced from charting platform TradingView.

The continued rise in yields is perhaps a sign that traders of risk assets, including bitcoin, might be wrong to conclude that inflation in the U.S. has peaked and the Federal Reserve will probably slow liquidity tightening in the coming months.

"If Thursday's news meant it was time to celebrate victory over inflation, then the market response should have been straightforward," John Authers, Bloomberg's opinion columnist, said in an article published Friday. “Bond yields should fall, as the Fed would logically seem unlikely to keep rates either as high or as long as had been feared."

However, yields have risen, which means fixed-income investors expect higher interest rates and are selling their bonds. Bond prices and yields move in the opposite direction. Bitcoin is sensitive to the Federal Reserve policy and has taken a beating this year with the central bank embarking on its most aggressive tightening cycle in decades.

Bitcoin again fails to establish a foothold above $24,000. (TradingView)
Bitcoin again fails to establish a foothold above $24,000. (TradingView)

Thursday's price move for BTC above $24,000 was short-lived. In the past three weeks, bitcoin has failed seven times to notch a price above $24,000 as of 0:00 coordinated universal time – used by many traders and charting tools as the unofficial end of the trading day in crypto markets that are always open.

The latest failure comes on the heels of world's biggest asset manager, BlackRock (BLK), announcing a new private spot bitcoin trust for institutional investors. So it’s not like there’s no bullish news.

Bitcoin found buyers on Wednesday after data released in the U.S. showed consumer prices jumped 8.5% in July compared with a year earlier, down from a 9.1% year-over-year jump in June. The soft inflation figure offered hopes that price pressures may have peaked. The Producer Price Index released Thursday told a similar story, lifting bitcoin to a two-month high of $24,929.

Some observers foresee a continued rise in bond yields. "Interestingly, we have seen a 'peak' inflation narrative, and despite a miss on CPI and PPI, we are now seeing rates rise,” Michael Kramer, founder of Mott Capital Management, wrote in a market update published Thursday.

"Could this indicate that rates have stopped decreasing and will be heading higher from here? I believe so because if weaker than expected inflation data can't send rates down, they have one way to go, which is up," Kramer added.

Analysts told CoinDesk on Thursday that bitcoin's post-inflation rally could be a bull trap. The market may see plenty of volatility ahead, as the Fed is scheduled to accelerate its balance sheet shrinkage from September.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.