“As the Treasury Basis Trade Breaks Down, Bitcoin Longs Vulnerable Near $74K Support”

Treasury Turmoil Triggers Crypto Shakeout as Bitcoin Eyes Key Liquidation Zone

A dramatic spike in U.S. Treasury yields is sending shockwaves across global markets — and crypto isn’t being spared. As the “Treasury basis trade” unravels, market liquidity is tightening, with bitcoin (BTC) slipping toward a key support zone that could ignite a wave of liquidations.

Bitcoin briefly dipped below $75,000 early Wednesday before clawing back toward $76,000. But analysts warn the selloff may just be beginning.

At the heart of the turbulence: a massive unwind of carry trades in the Treasury market, where hedge funds had piled into arbitrage positions between futures and bonds. That strategy is now under pressure, sending the 10-year Treasury yield soaring nearly 70 basis points to 4.5%, and the 30-year nearing the critical 5% mark.

“This is no ordinary move,” said Justin Low of ForexLive. “We’re seeing cracks in funding markets that hint at broader liquidity stress — not just a technical shift in yields.”

The crypto market is reacting accordingly. The MOVE index, which tracks Treasury market volatility, surged to its highest level since October 2023, a signal that uncertainty is peaking.

Data from Hyblock Capital shows bitcoin long positions could be at risk between $73,800 and $74,400. Should BTC fall into that zone, it could trigger forced liquidations across major exchanges, accelerating the downside.

“Once those clusters get hit, we often see momentum-driven drops,” Hyblock noted. “If BTC hits $70K, we expect at least another $200 drop as stop-losses and liquidations pile up below that level.”

On the flip side, if bitcoin manages to hold and recover, short liquidations could stack up quickly between $80,900 and $92,600 — key zones where trapped bears may be forced to cover.

The bigger picture, however, remains murky. With yields surging and macro headwinds intensifying, traders are bracing for more volatility in the days ahead. For bitcoin bulls, the near-term path may depend less on crypto fundamentals and more on what happens next in the bond market.

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