- For a sustainable rally, Bitcoin needs US high yield rates to fall below 6% or 7%.
- Network activity is declining and major investors are currently inactive.
Bitcoin [BTC] is still more than $10,000 below the all-time high reached earlier this year. The king crypto has struggled to even reach the $65,000 mark, and so far? It fails.
Popular financial analyst Timothy Peterson pointed out that the US high yield rate is a key indicator for the market, emphasizing that it must fall below 6% or 7% for Bitcoin to effectively maintain record highs.
Economic indicators and the price of Bitcoin
The American high yield rate stood at 7.54% at the time of writing, indicating a firm grip on potential financial growth and investment, including in the cryptocurrency market.
Historically, a decline in high interest rates often correlates with a rise in Bitcoin prices, as lower yields make alternative investments like Bitcoin more attractive.
This is because investors seek higher returns in a lower interest rate environment, which cryptocurrency can sometimes provide.
Source: YCharts
All in all, the US economy means a lot to Bitcoin investors. The recent auction of 30-year bonds by the US Treasury generated strong demand, putting downward pressure on interest rates.
Coupled with the latest unemployment data, investors are desperately anticipating rate cuts this year, which could lower high interest rates, potentially allowing Bitcoin to regain its higher price levels.
When we look at Bitcoin’s activity, we see some intriguing changes. According to recent facts van Santiment, Bitcoin network activity is declining.
This includes a decrease in the number of large-scale transactions, also known as whale movements.
It appears the whales are taking a step back, possibly waiting for more favorable market conditions before making any major moves, making the market even more volatile.
Source: Ali Charts/X
Meanwhile, Bitcoin ETFs are also showing some notable trends.
In the last 24 hours alone, there was a net inflow of around 1,60,000 BTC, which translates to around $100.50 million at press time prices, according to facts from Coinglass.
Source: Coinglass
Glassnode’s new ‘Breakdown by Age’ metric gave us a deeper insight into investor behavior during current market conditions.
In a bull market, it is often long-term investors who make the most gains, leaving short-term investors with losses.
These short-term losses could signal a turning point in the market. As you can see below, there was an uptrend in early 2024 when the market was bullish.
Source: Glassnode
Read Bitcoin’s [BTC] Price forecast 2024-25
The price of Bitcoin is not moving
Given its recent behavior, if the support level remains around $62,700 today and market sentiment remains positive, Bitcoin could gain new momentum towards $63,000 and above.
However, if the price breaks below the USD 62,700 support, there could be a further decline as traders can secure their profits, which could lead to greater selling pressure.
Source: TradingView