Stuck under the 200-day line, bitcoin faces pressure from higher Treasury yields

Bitcoin remains under pressure, continuing to trade below its 200-day simple moving average despite recent regulatory progress in the U.S., with rising Treasury yields emerging as a key headwind.

The cryptocurrency has struggled to regain momentum even after the Senate Banking Committee advanced the Clarity Act, a step that brings the legislation closer to a full Senate vote. Instead, attention has shifted to the bond market, where yields have been climbing steadily.

The two-year U.S. Treasury yield rose to 4.05% during Friday’s Asian session, marking its highest level since June 2025. The yield has increased by 13 basis points this week and more than 65 basis points since March, reflecting a sharp shift in expectations for Federal Reserve policy.

Stronger-than-expected inflation data has driven much of this move. April’s CPI and PPI readings came in above forecasts, raising concerns that inflation could remain persistent, particularly as higher energy prices and geopolitical tensions linked to Iran continue to influence global markets.

As a result, traders are reassessing the outlook for interest rates. With the Fed’s benchmark rate currently between 3.50% and 3.75%, the rise in short-term yields suggests markets are beginning to price in at least one additional rate hike.

CME FedWatch data shows the probability of a December hike has climbed above 44%, up from 22.5% just a week earlier. This marks a notable reversal from earlier expectations that the Fed would deliver multiple rate cuts before the end of 2026.

The shift in bond markets contrasts with President Donald Trump’s push for significantly lower rates. Trump has advocated for cutting borrowing costs to as low as 1% to support economic growth, but under Federal Reserve Chair Jerome Powell, policymakers have maintained a cautious stance, holding rates near current levels after gradually reducing them from around 5% in 2022.

Looking ahead, markets are also watching the potential for leadership changes at the Fed. Former governor Kevin Warsh, seen as more dovish on rates, has been floated as a possible successor, though current policy remains firmly guided by Powell.

Higher Treasury yields are reshaping the investment landscape by increasing the opportunity cost of holding non-yielding assets. As returns on government bonds rise, bitcoin and gold face growing competition from risk-free instruments that now offer more attractive yields. Treasuries also play a central role in global financial systems, widely used as collateral and embedded in funding and liquidity markets.

Against this backdrop, bitcoin is trading near $81,000, largely flat on the day but still below its 200-day moving average just above $82,000—a key technical level that many view as critical for confirming a longer-term bullish trend.

Gold is also under pressure, declining 0.7% to $4,614.

Meanwhile, the tokenized Treasury sector is benefiting from the shift. As yields climb, demand for blockchain-based access to government debt is increasing, with total value locked in these platforms surpassing $15 billion, according to rwa.xyz.

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