Bitcoin Breaks Out Amid Rising Yields and Strengthening Dollar
Crypto analyst Benjamin Cowen pointed out that Bitcoin's recent breakout feels like 'the upside down', as every other part of his macro thesis is playing out except for Bitcoin. According to Cowen, rising oil prices have pushed the 10-year yield to 5.1%, while the Fed falls behind in raising rates fast enough to match it.
The 2-year yield has jumped 20 basis points in a single day to 4.9%, and with the Fed funds rate at just 4%, Cowen argues that policy sits roughly a full percentage point below where it needs to be to bring inflation under control. This combination of rising yields and a strengthening dollar has stalled the S&P 500, which topped in mid-August and hasn't made a new high since.
Gold and silver are also struggling, right in the mid-September to mid-October window Cowen expected weakness. However, Bitcoin broke out instead of falling, mirroring two prior instances: the 2019 golden cross and the 2023 golden cross, both of which saw a dump followed by a rally.
Cowen admitted that his short-term credibility took a hit after previously assigning only a 35% probability that Bitcoin's low was already in. With price now trading above the May high, he said the odds have clearly shifted in favor of the bulls.