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Cryptos stumble, stocks slide as rising yields pressure risk assets

Kitco Media
By Jordan Finneseth
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Updated
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Cryptos stumble, stocks slide as rising yields pressure risk assets teaser image

(Kitco News) – Financial markets fell under pressure in trading on Wednesday after a spike to 4.64% in the U.S. 10-year Treasury yield rattled investors already concerned about the prospects for interest rate cuts in 2024. 

 

“Stock futures declined on Wednesday, as rising Treasury yields continued to pressure the broader market, despite gains from Nvidia,” said analysts at Secure Digital Markets. “The 10-year Treasury note yield increased for a second day, last trading around 4.6%. On Tuesday, the yield exceeded 4.5%, a worrisome level for investors, following a Treasury Department auction that saw weak demand.”

 

Despite the mid-week weakness, “the major averages are on track to close the month with impressive gains, bolstered partly by enthusiasm over a better-than-expected quarterly earnings season,” the analysts noted. “The S&P 500 is up 5.4% this month, the Dow has advanced 2.7%, and the Nasdaq has climbed 8.7%.”

 

At the closing bell on Wednesday, the S&P, Dow, and Nasdaq were all in the red, down 0.74%, 1.06%, and 0.58%, respectively. 

 

Data provided by TradingView shows that an early morning rally by Bitcoin (BTC) bulls was halted at $68,860, at which point bears gained the upper hand and dropped the top crypto to a daily low of $67,100 in the afternoon. 

 

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BTC/USD Chart by TradingView

 

“Bitcoin continues its pullback towards the 20-day moving average near 66,500, as anticipated,” said the analysts. “The support range of 65,000 - 66,000 remains robust for now.”

 

Further weakness is expected as shorts have started to pile into the market. 

 

“Since 4 am EST, open interest has increased by approximately 3.5%, representing around $500 million,” the analysts said. “With the current low levels of Cumulative Volume Delta (CVD), it appears that shorts are entering the market. As long as the Dollar Index and the 10-year yield trend higher, we expect continued pressure on risk assets.”

 

At the time of writing, Bitcoin trades at $67,201, a decrease of 1.72% on the 24-hour chart. 

 

Short-term weakness before a blow-off top

 

A survey of Crypto Twitter shows that while most analysts expect Bitcoin’s consolidation to continue in the near term, calls for a bullish breakout rally are becoming more frequent as the market starts to enter the golden period after Bitcoin halvings where prices have historically vaulted higher. 

 

Market analyst Rekt Capital noted that “Bitcoin continues to slide down after failing to reclaim the orange area as support,” and is now “showing signs that it has turned this orange area into new resistance.”

 

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But a follow-up post provided a little perspective, showing that Bitcoin has a history of similar weakness before breaking high. 

Crypto trader Jelle warned that volatility is likely to remain high for the next couple of months and encouraged fellow traders to “not get shaken out.” 

Market analyst Moustache noted the possible formation of a “Right-Angled Descending Broadening Wedge,” which suggests a potential breakout to $88,000 in the months ahead.

And The Bitcoin Historian showed just how far Bitcoin has come in its journey by providing the oldest known Bitcoin price chart in existence, noting that on May 25, 2010, a total of 1000 BTC were traded for just $3. 

Altcoins in a downtrend

 

It was a rough day for altcoins in the top 200, with most recording losses aside from a handful of meme tokens that saw their prices spike higher. 

 

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Daily cryptocurrency market performance. Source: Coin360

 

DOG•GO•TO•THE•MOON (DOG) led the pack with a 47.2% price surge, followed by a 15.6% gain for cat in a dogs world (MEW), and a 10% gain for Arkham (ARKM). ConstitutionDAO (PEOPLE) was the biggest loser, falling 16.3%, while BinaryX lost 16.2%, and Bonk (BONK) fell 11.8%. 

 

The overall cryptocurrency market cap now stands at $2.53 trillion, and Bitcoin’s dominance rate is 52.6%.

Kitco Media

Jordan Finneseth

Jordan Finneseth is a Crypto Market Reporter for Kitco Crypto. Coming from a background in Psychology and Human Behavior, he began to focus his attention on the cryptocurrency space in early 2017 after noticing the rapid growth of this emerging market. Since that time, Jordan has worked as a content creator for multiple projects and as a crypto news journalist reporting on the latest developments within the cryptocurrency market. Jordan holds a Master of Science in Clinical/Counseling Psychology and a pair of Bachelor's degrees in Psychology and Environmental Health Science. You can reach out Jordan Finneseth at 1- 514.670.1372.

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Bitcoin priceBTCcryptocryptocurrencystocksaltcoin10-year U.S. Treasuryinterest rates

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