- Bitcoin’s rally has slowed amid expectations of a US Federal Reserve interest rate hike.
- The outflow of capital from risky assets is explained by the rise in yields on 10-year and 30-year bonds.
Financial markets are currently revising expectations regarding US monetary policy. Hopes for future rate cuts are causing traders to price in the possibility that the Federal Reserve might hold rates at a high level and even increase them at the end of this year.
This is significant for Bitcoin because the recent BTC rally was largely based on a different macroeconomic scenario – slowing inflation, possible Fed easing, increased liquidity, and growing institutional adoption through spot bitcoin ETF.
A chart showing the Fed’s target rate probability, showing how markets view the likelihood of a 2026 rate hike at 54%. Source: CME FedWatch
The Federal Reserve added to uncertainty by keeping its benchmark interest rate unchanged on April 29. unchanged at 3,50%–3,75%. Since then, futures markets have more often reflected expectations of tightening, and at some point, traders were pricing in probability of a rate hike in December more than 55%.
This has already impacted traditional markets: the yield on 10-year bonds is 4,67%, and on 30-year bonds it is more than 5,1%, according to According to Ministry of Finance on May 19. Rising yields increase the attractiveness of government debt and monetary instruments compared to non-income-producing assets such as Bitcoin.
Meanwhile, the US dollar posted its best weekly performance in two months, and a stronger dollar typically tightens global liquidity conditions and puts additional pressure on risk assets, especially cryptocurrencies.
So now Bitcoin trades in an environment of elevated bond yields, a strengthening dollar and a constant outflow of funds from ETFThis is why we are seeing capital outflows from US spot markets. bitcoin ETF.
SoSoValue data show, that on May 18 from spot bitcoin ETF The US saw a net outflow of $648,6 million, and another $331,1 million on May 19. As a result, the $76,000-$77,000 range has become a technical and psychological support zone for Bitcoin.
According to the data received Happy Coin News, the total capitalization of the cryptocurrency market approached to $2,65 trillion, and Bitcoin dominance equals 58,2%. Himself Bitcoin traded below $77,000 near the $76,700 mark.
Risk Warning:
The information on this website is for informational and educational purposes only and does not constitute investment advice or financial recommendations. Cryptocurrencies and digital assets carry a high level of risk, including possible loss of capital. The editors are not responsible for decisions made based on the published materials. It is recommended that you conduct your own research (DYOR) before making investment decisions. Read the editorial policy. https://happycoin.club/about/