Bitcoin could be on the verge of a breakout as favorable bond market conditions support riskier assets, according to Standard Chartered.
The bank sees limited Treasury yields and a stable economy as key factors that could lead to further gains for Bitcoin and the broader cryptocurrency market.
The 10-year U.S. Treasury yield remained below 4.50%, signaling that the bond market is not expecting aggressive Federal Reserve tightening, Geoff Kendrick, Global Head of Digital Assets Research at Standard Chartered, wrote in a note today.
“Despite the strong details in today’s US employment release, the failure of 10-year US Treasury yields to break above 4.50% so far is very constructive for digital assets,” Kendrick said. “Yields are not higher, but the economy is still in good shape, a Goldilocks zone for digital assets.”
This outlook is in line with the views of 21Shares Crypto Research Strategist Matt Mena, who points out that falling bond yields and a weaker U.S. dollar have created a favorable backdrop for risk assets, particularly Bitcoin, which tends to thrive in easier monetary conditions.
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Kendrick suggested that if the 10-year Treasury bond remains below 4.50% by the end of the week, Bitcoin could head toward a key resistance level of $102,500. He added that if no significant negative catalysts such as unexpected regulatory actions or macroeconomic shocks emerge, Bitcoin could rally above its all-time high of $108,000 in February.
The latest U.S. employment report for January showed a mixed picture, falling short of estimates but showing resilience. The economy added 143,000 jobs, below expectations of 170,000 and significantly below December’s 307,000, according to the Bureau of Labor Statistics. However, the unemployment rate fell to an unexpected 4% and wage growth rose to 4.1% from 3.9%, indicating continued strength in the labor market.
This combination could reduce pressure on the Fed to keep interest rates high and create a supportive environment for Bitcoin as investors position for a possible rate cut later this year, 21Shares’ Mena said.
*This is not investment advice.
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