Bond Yields and Liquidity Threaten Bitcoin Rally

Bitcoin's rally is facing a growing threat from macroeconomic factors, according to analysts at Bitunix. Despite AI-driven optimism in the market, rising bond yields and tighter liquidity pose a significant risk to cryptocurrency prices.

Rising long-dated U.S. Treasury yields have led to higher discount rates, putting pressure on valuations in both technology stocks and cryptocurrencies, as inflation rises even with the Fed keeping rates unchanged. 'Although the Fed kept rates unchanged, three officials publicly supported a rate hike,' said Chen.

The yen carry trade is also a concern, as investors may start to unwind their positions if policymakers continue to intervene to curb the yen's decline. This could lead to tighter global liquidity conditions and put pressure on risk assets.

Investors are closely watching key economic reports and earnings from companies like Palantir, AMD, and SpaceX for clues about the strength of AI investment and the broader economy.