Lower US Yields and Weak USD Can Be Supportive For Bitcoin

Looking at the recent financial data, the U.S. Consumer Price Index (CPI), which measures changes in the price level of a market basket of consumer goods and services, decreased more than what was predicted, showing a 3.2% year-over-year decline.

This had a notable impact on the value of the U.S. dollar, causing it to drop significantly alongside U.S. bond yields.

Meanwhile, the stock market and commodities such as precious metals have seen an uptick in their value.

This is particularly significant as it has led to a substantial downward shift in the U.S. Dollar
Index, which measures the value of the dollar against a basket of foreign currencies, and a
corresponding movement in bond yields. These changes are considered key indicators of the
market’s reaction as US yeilds shows five waves down from the recent highs.

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10 year us treasury bond yields elliott wave forecast chart

Notably, despite the weakening of the U.S. dollar following the release of the inflation report, cryptocurrencies like Bitcoin have experienced a retracement. The chart suggests that Bitcoin is currently in a corrective phase, known as a “wave four” pullback of an Elliott wave impulse, within a larger bullish trend. This could indicate a consolidation period before a potential upward move, as the cryptocurrency market often has delayed reactions to macroeconomic shifts. Investors might be looking for cryptos to “catch up” with the broader movements in the market as the situation develops. The big upside level for Bitcoin is 40k.

Twitter:  @GregaHorvatFX

The author may have a position in the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.