On April 14th, the 2-year and 10-year US Treasury yields experienced a decline following Bitcoin's impressive weekly performance, marking its best since January. Bitcoin surged by 6.79% over the past week, sparking discussions about potential factors that could continue to support its upward trajectory.
During the New York trading session, the 10-year treasury yield dropped by 8.2 basis points to reach 4.40%, while the 2-year treasury yield slipped by 8 basis points to 3.88%. This decline in yields was attributed to the announcement of possible tariff exemptions on smartphones, computers, and semiconductors, aimed at allowing US companies some time to transition their production domestically. However, US President Donald Trump clarified that these exemptions were temporary in nature.
The tariff exemptions coincided with a bullish week for Bitcoin, which saw a significant price increase from forming new yearly lows at $74,500 to reaching $86,100 between April 9-13. The easing US treasury yields could potentially benefit Bitcoin by reducing the attractiveness of fixed-income assets, thereby driving more capital into risk-on assets like BTC. Nonetheless, the uncertainty surrounding the temporary nature of these exemptions and the ongoing trade tensions with China could expose Bitcoin to increased volatility.
Bitcoin's role as an "inflation hedge" has been a topic of debate, but recent uncertainty surrounding trade policies has heightened inflation concerns, bolstering Bitcoin's narrative as a store of value. However, recent US inflation data suggested a cooling trend, with the Consumer Price Index for March 2025 indicating a year-over-year inflation rate of 2.4%, down from 2.8% in February.
Technical analysis from Material Indicators and Alphractal founder Joao Wedson suggests that Bitcoin may be poised for a bullish reversal. Bitcoin has maintained a bullish position above its 50-weekly moving average and quarterly open at $82,500, indicating a reduced likelihood of revisiting previous lows in the near future. Additionally, indicators tracking the price difference between Bitcoin's perpetual futures and spot markets are showing signs of narrowing, potentially signaling a shift in market sentiment towards buyers.
While the market remains dynamic and unpredictable, investors are advised to conduct their own research and exercise caution before making investment decisions. Bitcoin's resilience in the face of changing economic conditions and market dynamics continues to fuel discussions about its potential as a digital asset with unique value propositions.
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