Bitcoin Falls Below $64K as Surging Treasury Yields Amplify Fed Rate-Hike Expectations

Bitcoin Struggles as Treasury Yields Climb

Bitcoin experienced a significant correction on Friday, dipping below the $64,000 level as broader market conditions deteriorated. The decline, which exceeded 1.6%, accelerated following the opening of Wall Street trading. According to analyses from trading firm Mosaic Asset Company, surging US Treasury yields played a central role in driving the cryptocurrency sell-off. The firm emphasized that massive shifts were occurring across the yield curve despite a weaker-than-expected US Consumer Price Index report, which might otherwise have been interpreted as supportive for risk assets. This disconnect highlighted the complexity of current market dynamics, where inflation data failed to provide relief to equity and crypto markets already pressured by rising borrowing costs.

Fed Rate Expectations Drive Risk Asset Pressure

The two-year US Treasury yield emerged as a key indicator of shifting Federal Reserve policy expectations, climbing to 4.31%—well above the central bank’s target range. Mosaic noted that this yield typically leads changes in Federal Reserve fund rates, influencing risk appetite across asset classes. The two-year rate’s movement carries particular significance because it reflects market expectations for near-term monetary policy shifts. According to CME Group’s FedWatch Tool data, markets currently anticipate the Federal Reserve will maintain unchanged interest rates in the near term, while pricing in a 0.25% increase in September, with additional hikes anticipated before the end of 2026. These rate expectations have created headwinds for equity markets and dampened demand for riskier assets like cryptocurrencies, as investors reassess portfolio allocations in response to evolving interest rate forecasts.

Technical Support Levels and Market Structure

Market observers noted that substantial bid liquidity appeared on the Binance exchange, suggesting potential price support mechanisms preventing deeper losses. Crypto traders referenced a “plunge protection team” dynamic—a pattern previously observed in early June—where significant buy orders positioned below the market price aim to limit downside volatility. Traders identified a familiar technical pattern, with Bitcoin facing resistance near the $65,950 level—its 50-month exponential moving average. Some analysts drew parallels to Bitcoin’s price behavior during the 2022 bear market, suggesting potential for further consolidation before meaningful recovery. The $64,000 level emerged as a critical support point, with breaks below this threshold potentially invalidating short-term bullish market structures.

This dynamic underscores how macroeconomic factors and central bank policy expectations continue to shape cryptocurrency market movements, reinforcing the sensitivity of digital assets to broader economic conditions and their interconnection with traditional financial markets.

Source: CME Group, via Cointelegraph. Not financial advice.