Welcome to Extreme Investor Network, where we provide you with the latest insights and analysis on the stock market, trading, and all things Wall Street. In today’s blog post, we’ll discuss the recent developments in the bond market and how they may impact the price of Bitcoin.
According to CME data, bond traders have reduced their expectations of a 50 basis point interest rate cut in the upcoming Fed meeting, with the probability now standing at 43.5% compared to 69% the previous week. However, the likelihood of a 25 bps rate cut has increased to 56.5%. Lower interest rates tend to increase appetite for riskier assets, as they make safer alternatives like U.S. Treasury notes less attractive due to their lower returns.
The recent decline in the yield offered by the U.S. 10-year Treasury note is seen as bullish for non-yielding assets like Bitcoin. However, as of Aug. 14, Bitcoin seems to be caught in a “sell-the-news” situation, exacerbated by the reduced expectation of a larger rate cut.
Looking at Bitcoin’s on-chain outlook, the cryptocurrency is showing signs of recovery after the market turmoil on Aug. 5. On-chain data indicates a shift in sentiment, with larger wallets associated with ETFs starting to accumulate Bitcoin again after a period of selling following the all-time high in March.
Overall, the potential for rate cuts and the changing dynamics in the bond market could have a significant impact on Bitcoin’s price in the coming sessions. Stay tuned to Extreme Investor Network for more updates and analysis on this evolving situation.