US Treasury Yields Spark Queries as Bitcoin Approaches Golden Cross

Bitcoin nears Golden Cross.
Treasury yields reflect rate cuts.
Mixed signals for risk assets.
With the approach of an important
configuration
In a technique known as the Golden Cross, experts consider concerns about rising U.S. Treasury yields to be overblown, according to CoinDesk. At the time of publication, the price of Bitcoin was trading at $66.523,36, down 1% over the past 24 hours.
London-based macroeconomic research firm TS Lombard suggests that fears about potential policy mistakes by the Federal Reserve (Fed) may be unfounded. According to Dario Perkins, managing director of global macro at TS Lombard, the current outlook does not necessarily reflect a policy mistake. In a note to clients, he noted: “Central banks think policy is tight and want to cut gradually. If employment collapses, they will cut quickly. If employment recovers, they will cut less.”
Treasury yields, which reflect the risk-free rate, have risen significantly following the Fed’s recent interest rate cut. The increase could theoretically divert investment away from markets considered riskier, such as cryptocurrencies and technology stocks. However, rising yields may not signal an aversion to risk, as some analysts have suggested.
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Interestingly, historical analysis of yields shows that after rate cuts in non-recessionary scenarios, yields tend to strengthen, which contradicts the idea that such moves herald economic downturns. Recent history itself illustrates that rate cuts do not necessarily lead to recessions or runaway inflation, as occurred in 1967. Perkins adds that the current situation is quite different from that time, highlighting the strengthening of bond yields as a post-rate-cut normality.
In the cryptocurrency world, Bitcoin is close to forming what analysts call a Golden Cross, a technical signal that occurs when the short-term moving average crosses above the long-term average, indicating potential upside in price. This technical formation, while seen by some as overdue, has historically signaled the start of major bull runs.


Disclaimer:
The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading cryptocurrencies carries a risk of financial loss.