Bitcoin price could rise as U.S. bond yields, fear and greed index fall

Bitcoin price held steady above the critical support level of $80,000 as trade-related risks continued to rise.

Bitcoin (BTC) was trading at $83,230 Friday morning, a level it has maintained for the past few days. This level marks a 9% gain from its lowest point in March.

Bitcoin’s performance outpaced that of the U.S. stock market. The Dow Jones index plunged by over 1,080 points on Friday, after falling more than 1,000 points the previous day. It is now down 13% from its 2024 high, hovering near levels last seen in August 2023.

Other indices have performed even worse. The Nasdaq 100 has officially entered a bear market, falling over 20% from its yearly peak. The S&P 500 and Russell 2000 have also posted significant declines.

Still, two macro catalysts may help Bitcoin and equities find support. First, the bond market has surged this week, with yields continuing their downward trend. The 10-year U.S. Treasury yield dropped below 4% for the first time in months. Meanwhile, the 30-year and 2-year yields declined to 4.40% and 3.57%, respectively.

Falling yields suggest rising fears of a potential recession, which may prompt the Federal Reserve to intervene. Historically, the Fed has two main tools in its playbook: interest rate cuts and quantitative easing. Both have historically been bullish for risk assets like Bitcoin and stocks — as seen during the Covid-19 pandemic and the Global Financial Crisis.

Another potential Bitcoin catalyst is the growing fear in the market. The CNN Fear and Greed Index has plunged to the extreme fear zone of 4, down from 50 in January, highlighting widespread panic among market participants.

Meanwhile, the Crypto Fear and Greed Index has fallen to 25, firmly in the fear zone. Historically, both stock and crypto markets tend to rally when fear peaks, echoing Warren Buffett’s famous quote: “Be greedy when others are fearful, and fearful when others are greedy.”

Bitcoin price technical analysis

The weekly chart shows that Bitcoin remains in an uptrend despite the recent pullback. It is trading just above the lower bound of the ascending channel that has been in place since October 2022.

BTC has also held above the 50-week moving average, another sign that bulls remain in control, for now. Therefore, there is a strong likelihood that Bitcoin will resume its bullish trend once the current wave of market panic subsides.