Bitcoin Under Pressure as Bond Yields Rise

The latest moves in crypto markets, in context

By the CoinDesk Markets Team

Edited by Bradley Keoun, Managing Editor

September 28, 2021

Sponsored by

Bitcoin (BTC)

-3.2% $42,000

Ether (ETH)

-5% $2,933

(Price data as of September 28 @ 12:00 UTC)

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Good morning, and welcome to First Mover. Here's what's happening this morning:

Market Moves: Bitcoin Under Pressure as Treasury Yields Rise

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Biggest Movers

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Gainers:

None of the CoinDesk 20 digital assets were in the green on Tuesday.

Losers:

Filecoin (FIL): -6.4%

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Market Moves

by Omkar Godbole

Bond Yields Drive Market Action

Bitcoin's relationship with the government bonds is back in focus after a gap of five months, thanks to the renewed rise in the longer duration bond yields in the U.S. and Europe fueled by expectations for tighter monetary policy.

While the 10-year Treasury yield is hovering at three-month highs near 1.5%, its British counterpart has moved above 1% for the first time since the March 2020 crash. The real or inflation-adjusted 10-year Treasury yield has increased by 20 basis points this month to -0.87%.

Bitcoin is down 2% for the week, in line with the dominant market narrative of the cryptocurrency being a store of value asset like gold. An uptick in real yields is said to dilute the appeal of the yellow metal.

Macro traders holding bitcoin as an inflation hedge may sell if real yields continue to rise. Bitcoin fell by 20% during the previous episode of an accelerated rise in yields in late February. However, as of now, real yields look to have limited upside, as the ongoing oil price rally may bring more inflation. Past data shows bitcoin thrives in a rising nominal yield environment.

The path of least resistance for bitcoin remains to the higher side unless rising yields or other macro factors destabilize global equity markets.

Ether's options market shows investors are wary of short-term sell-off in the second-largest cryptocurrency by market value. The one-week put-call skew measuring the spread between the price of puts or bearish bets relative to calls has jumped from 11% to 17% in the past 24 hours. Data from QCP Capital's Telegram channel show that an individual trader or group of traders bought Oct. 8 expiry puts at $2,600 and $2,700 strikes in large numbers early Tuesday.

Bitcoin has charted majority of its lifetime gains in rising yield periods. (Source: ByteTree)

Read the original story here:

Bitcoin, Gold Under Pressure as Dollar Tracks US Treasury Yields Higher

Technician's Take

by Damanick Dantes, CMT

Bitcoin Declines from Resistance; Approaching $40K Support

Bitcoin (BTC) is trading lower after sellers responded to resistance near $45,000. The cryptocurrency is down about 4% over the past 24 hours to $41,909 as upside momentum slows.

Bitcoin's four-hour price chart shows the cryptocurrency trading below its 100-period moving average. (TradingView, CoinDesk)

Read the original story here:

Bitcoin Declines from Resistance; Approaching $40K Support

A Message from ErisX

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BOLO

Be on the lookout for the following events today:

ICYMI

In case you missed it, here are the most recent episodes of "First Mover" on CoinDesk TV:

"First Mover" host Christine Lee and co-host Emily Parker talk to crypto OG Bobby Lee, Ballet Founder & CEO, and author of "The Promise of Bitcoin," as prominent crypto exchange Huobi Global says it'll drop accounts held by Chinese mainland users by the end of the year. Rich Rosenblum, Co-founder & President of trading firm GSR, shares his take on bitcoin's next price movement. Plus, David Pakman, Managing Partner at CoinFund, shares his top investments in the space right now.

A Message from CoinDesk

Financial advisors are taking a cautious approach to bitcoin as client interest in the space increases and new products offer retail investors easier access to this new asset class. As trusted guides, advisors cannot risk falling behind, even if the jury is still out on bitcoin's role in a client's portfolio.

At Bitcoin for Advisors 2021on Oct. 6, Michael Kitces and Tyrone Ross share insights from the front lines. Apply today.

Latest Headlines

More Crypto Platforms Exit China Following Ban on Related Transactions: Reports

Two more crypto exchanges and a crypto information platform are giving Chinese users the boot.

Crypto OG Bobby Lee Says China’s OTC Desks Are Next to Go

Crypto exchanges in China have already shut down and over-the-counter (OTC) trading desks are likely to follow suit, Lee predicted Monday.

U.S. central bank's Boston and Dallas branches disclosed that their presidents were resigning, after a furor over their trading in stocks and other assets led to a review of ethics rules.

Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.

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