Bitcoin BTC$76,985.53 dipped below the $77,000 mark on Monday in Asia, influenced by climbing oil prices and Treasury yields that weighed on risk assets. Meanwhile, prediction-market traders maintained a low probability for any immediate relief from the Federal Reserve. The decision arrives amid a backdrop of increasingly unfavorable macro conditions for the cryptocurrency market. The 30-year Treasury yield climbed to 5.13%, marking its highest close since 2007. Meanwhile, Polymarket traders have assigned a 98% probability to no Federal Reserve action in June and a 94% probability for July. The 10- and two-year yields continued their ascent from last week, reaching 12-month highs. This is significant for bitcoin as it indicates that traders do not anticipate the Fed to promptly counteract tighter financial conditions.
As yields climb, the opportunity cost of holding non-yielding assets like BTC increases, often putting pressure on speculative assets, particularly when inflation worries are influencing the market. On-chain data presented a more nuanced picture. According to data, nearly 60% of the bitcoin supply has remained inactive for over a year, and BTC balances on exchanges have reached a six-year low. It has highlighted the short-term holder MVRV, or market value to realized value, which serves as an indicator of whether recent bitcoin purchasers are experiencing gains or losses. The current reading stands below 1, suggesting that, on average, newer buyers find themselves underwater. The market may become increasingly sensitive to additional declines, as investors holding onto losses have diminished capacity to withstand another macro-driven selloff.
It was reported that traders are currently focused on multiple catalysts this week, such as Nvidia earnings on Wednesday, U.S. PPI on Thursday, and ongoing developments regarding the CLARITY Act, the market structure bill making headway in Washington. Nvidia has emerged as a key risk indicator due to its pivotal position in the AI sector, while the PPI will provide markets with further insight into whether inflationary pressures are expanding beyond the energy sector. The immediate focus in the crypto space is whether bitcoin can find stability amid persistently high interest rates. Limited spot-selling pressure can be attributed to low exchange balances and an inactive older supply.
However, they do not stop sudden fluctuations when macro traders reduce their risk exposure or when recent purchasers experience greater losses. Bitcoin finds itself caught between two opposing forces: on-chain data indicating that long-term holders remain predominantly inactive, and a rates market that is providing investors with diminishing incentives to increase their exposure ahead of the upcoming inflation report. Hyperliquid’s HYPE token surged by 7% in just 24 hours following the launch of the first pre-IPO perpetual market on Trade.xyz. This new offering provides synthetic exposure to SpaceX, with a reference valuation set at $1.78 trillion.