Bitcoin Rises 0.24% Amid US Treasury Market Turmoil

Bitcoin (BTC) has seen a slight increase of 0.24% today, trading around $76,481 in the early Asian session after experiencing a 3.71% drop on Tuesday. While Bitcoin's price has been declining, the US Treasury market is facing significant turmoil. The 10-year yield has surged to 4.5% and the 30-year yield has hit 5%, leading to speculation about a potential $2 trillion basis trade unwind or China selling treasuries. This market chaos has sparked discussions about the Federal Reserve announcing an emergency rate cut, which could trigger a buying spree among crypto investors and potentially reverse Bitcoin's bearish trend.

The recent volatility in the US Treasury market, with the 10-year yield jumping 17.16% from a low of 3.840% to 4.499% over the past 72 hours, has coincided with a 2.53% increase in Bitcoin's price over the last four hours. This suggests that investors may be seeking alternative assets amid the market turmoil. The basis trade unwind, a leveraged forced-selling spiral, is causing Treasury prices to drop rapidly, even in a risk-off environment where bonds typically rally. This phenomenon is eroding Treasuries' safe-haven appeal during the trade war turmoil.

Analysts are closely monitoring the situation, with some predicting that without an emergency rate cut and a massive quantitative easing program, the market could face a significant crash similar to the 1987 stock market collapse. The probability of a rate cut in May has surged from 10.6% a week ago to 58.9% today, according to market data. This shift in sentiment reflects growing concerns about the economic impact of the Treasury market meltdown.

If the Federal Reserve announces an emergency rate cut, it could prompt a massive buying spree from investors, catalyzing a recovery rally for Bitcoin's price and the broader crypto market. Key levels to watch for a potential rally include $81,200, $84,150, and $90,000. A flip of $90,000 into a support level could suggest a paradigm shift favoring bulls, opening the door for a bullish Bitcoin price prediction with a target of $100,000 and potentially a new all-time high. However, if the Fed holds off on a rate cut, both the stock and crypto markets could face further declines, with Bitcoin's price potentially dipping into the $70,000 region.