Bitcoin Drops 2.1% to $93,500 as Treasury Yields Fall

Bitcoin's price experienced a notable correction, dropping by $2,000 to $93,500 on April 28. This decline mirrored the decrease in US Treasury yields, indicating that investors were seeking safer assets amidst growing macroeconomic concerns. The drop in yields suggests a shift in investor sentiment towards more secure investments, reflecting a broader decline in risk appetite across major financial markets.

Investors had initially shown optimism over the weekend following reports that China had reduced tariffs on selected US semiconductor and circuit board imports. This news boosted sentiment, with the US Russell 2000 small-cap index maintaining positive momentum. However, this optimism was short-lived as US Treasury Secretary Scott Bessent's comments on trade agreements with China reversed the positive sentiment.

Despite the recent bullish momentum, which has kept Bitcoin's price above $90,000, there are concerns about the sustainability of this trend. Much of the recent price support has been attributed to $4.28 billion in Bitcoin acquisitions by Strategy since mid-March. However, the utilization of 97% of the previously approved common share issuance raises questions about the long-term viability of this accumulation strategy.

Bitcoin's inability to sustain levels above $95,000 appears to be linked to broader macroeconomic concerns. The cryptocurrency's price movements have been closely tied to stock market trends, indicating that investors are not yet convinced of Bitcoin's effectiveness as a hedge during potential economic downturns. This correlation suggests that Bitcoin's price is still influenced by broader market conditions rather than its intrinsic value as a decentralized asset.

While the stock market is benefiting from a robust earnings season, with 73% of US companies reporting earnings that exceeded analysts’ expectations, Bitcoin's price is being weighed down by perceptions of deteriorating macroeconomic conditions. US existing home sales in March recorded their largest monthly decline in over two years, falling 5.9% compared to the previous month. Additionally, China has outlined plans to support employment and assist exporters after factories reduced production due to weak consumer demand.

For Bitcoin to achieve a sustained rally above $100,000, it will need to decouple from stock market trends and provide further evidence of central bank liquidity injections to prevent a crisis. Investors are closely monitoring the trajectory of US interest rates and the possibility of a reversal in the Federal Reserve’s balance sheet, which could end a period of monetary tightening that has lasted for more than two years. A true breakout toward $100,000 will require stronger liquidity signals and a clearer divergence from equities.