Treasury Yields Expected to Peak Soon Bitcoin May Benefit Post-Elections

Analysts are predicting that the 10-year U.S. Treasury yield will peak in mid-November, driven by weak employment data and a shift in market sentiment. According to Woofun AI analyst Benjamin Cowen, this peak and subsequent decline will create a favorable environment for risk assets like Bitcoin.

The yield on the 10-year Treasury note hit a high of 5.342% on October 1, its highest level since early 2002. Historical data from midterm election years 2018 and 2022 supports Cowen's forecast, showing yields peaked between early October and mid-November before declining through December.

Cowen had previously targeted 5% as a peak but now sees a potential range of 5.4% to 5.6%. The Federal Reserve's September rate hike initially caused market panic, but the probability of an October rate hike dropped sharply from 64% to 17.7% within a week. Weak labor market conditions, with just 29,000 new jobs in September, have eased concerns about further rate increases.

Bitcoin faced significant pressure under high yield conditions but rebounded sharply after the employment data release, with short-sellers incurring losses of approximately $27.5 million. Cowen expects interest rates to begin falling in mid-November, shortly after the midterm elections, which could provide relief for assets like Bitcoin. However, he cautions that long-term interest rates may continue to rise, posing risks for non-income-generating assets.