Bitcoin's projected value facing turbulence due to bond market unrest and a decline in retail investment
In a recent analysis penned by CEO Shubh Varma of Hyblock Capital, the Bitcoin price outlook is under scrutiny due to a combination of factors affecting global markets.
The report suggests that patience is crucial as conflicting signals play out, influencing the overall Bitcoin price outlook. The Bitcoin price, currently trading at $84,179.30, down 1.06% in the past 24 hours, is facing growing headwinds. These headwinds include shaky global markets and a fragile U.S. bond market, where more severe stress has emerged, with surging Treasury yields threatening financial stability after the "treasury basis trade imploded."
The analysis points to a tumultuous week where tariff headlines dominated market sentiment, causing sharp swings in equities. This turbulence is reflected in the Bitcoin market, with trading volume over the last 24 hours dropping sharply by 24.59%, totaling $27.65 billion.
Data from Bybit and Binance shows resistance near 84,950-85,200 and key support around 76,450-76,750. Intermediate levels are noted near $82,500 and $80,000 on Binance.
Negative orderbook ratios and increased open interest add to the friction in the Bitcoin market. The report underlines that historically, BTC price is inversely correlated with the percentage of retail traders holding long positions on Binance. Recently, the percentage of retail traders holding long positions has fallen to the 11th percentile, hitting a low of 40.77%. A rise back towards 60% could precede a price drop.
Hyblock Capital views Treasuries as still maintaining their role as a safe asset, but acknowledges increased market scrutiny and evolving perceptions due to recent economic and geopolitical developments. Stablecoins might rise as a "new distribution channel for Treasuries," while Bitcoin could benefit as both a risk-on alternative and a risk-off hedge.
Global capital flows are adding complexity, with China's firm public stance on trade and a trend of European and Asian investors selling U.S. bonds and repatriating funds. This shift in capital flows could potentially impact the Bitcoin market.
Scott Bessent's comment distinguishes between a 'Mag7 problem, not a MAGA problem', highlighting perceived tech overvaluation amid the chaos. Hyblock Capital questions whether this is a temporary blip or a systemic shift in how Treasuries are perceived, potentially driving demand for alternatives.
The Bitcoin market capitalization now stands at $1.66 trillion, down 1.07%. Despite the challenges, Bitcoin has gained 9.28% over the past week and remains up 1.22% over the past 30 days.
Hyblock Capital cautions that the bond market remains a "ticking time bomb." As the situation unfolds, investors will be closely watching the Bitcoin market for signs of resilience or further turbulence.
