Bitcoin turns cautious – U.S. bond yields near 4%, test market strength

In recent months, the asset has tracked macro developments more closely, with U.S. economic data shaping sentiment across risk markets.

While Bitcoin [BTC] continues to hover near the $80,000 region and geopolitical tensions have eased, attention has shifted to the bond market.

The U.S. 2-year Treasury yield now shows early signs of strength, raising concerns about tightening financial conditions.

Rising yields revive risk-off sentiment

The 2-year yield has started to form a head-and-shoulders pattern—a technical structure that often precedes upward breakouts.

If confirmed, the move could push yields above the 4% threshold, with room for further upside. Higher yields typically reflect tightening liquidity and elevated economic risk, conditions that tend to weigh on risk assets, including Bitcoin.

The underlying drivers remain because inflationary pressure continues to build, increasing the likelihood of prolonged higher interest rates.

U.S. inflation rose to 3.3% in March, its highest level since May 2024, even as the Federal Reserve held rates steady at 3.75% during its latest meeting.

This backdrop has prompted investors to adopt a more defensive posture. Capital rotation away from risk assets has intensified, as higher yields increase the opportunity cost of holding volatile instruments like Bitcoin.

Correlation weakens downside pressure

Despite the macro headwinds, Bitcoin’s exposure to rising yields remains partial.

Current data shows a 39% correlation between Bitcoin and bond yields, leaving a significant degree of independence in price movement. This suggests that while higher yields may apply pressure, they are unlikely to dictate direction entirely.

In effect, Bitcoin retains room to extend gains if demand holds, and its trajectory now depends on whether buying momentum can offset macro-driven weakness.

So far, market behavior indicates that U.S. investors continue to support Bitcoin demand.

The Coinbase Premium Index, which measures Bitcoin trading activity in the U.S., shows that American investors are still willing to pay a premium compared to global markets.

At the time of reporting, the index remained around 0.031, reflecting sustained buying pressure over the past week.

Importantly, bond yields have not yet confirmed a breakout to the upside, leaving room for continued accumulation in the short term.

U.S. demand remains a key support

At the institutional level, spot Bitcoin exchange-traded funds (ETFs) have recorded sustained inflows. Investors logged nine consecutive days of net buying, culminating in a weekly high of approximately $823 million in inflows by the 24th of April.

However, signs of moderation have begun to appear as daily inflows dropped sharply to $14.45 million on the same day, suggesting that some participants may be easing exposure at higher levels.

On one side, sustained demand—particularly from U.S. investors—continues to provide support. On the other, rising bond yields threaten to tighten liquidity and shift sentiment toward risk aversion.

Until yields confirm a breakout above 4%, the market remains in a holding pattern. However, a decisive move higher could strengthen macro headwinds and challenge Bitcoin’s current structure.