Bitcoin and Ethereum Fall as Rising U.S. Bond Yields Trigger Market Correction

Bitcoin and Ethereum Correct as Rising U.S. Bond Yields Weigh on Cryptos

Bitcoin and Ethereum– The financial markets have been rocked by growing tensions, leading to a sharp correction in Bitcoin (BTC) and major altcoins. Bitcoin, the leading cryptocurrency, recently fell below the crucial $100,000 mark, while Ethereum (ETH) dropped below $3,400. This pullback is happening amid worsening global economic conditions, raising concerns about the future of the crypto market.

Rising U.S. Bond Yields Fuel Market Volatility

One of the primary drivers behind the recent downturn is the rise in U.S. bond yields. The yield on 10-year U.S. Treasury bonds hit 4.70%, with yields for 5- and 30-year bonds climbing to 4.50% and 4.61%, respectively. This increase in bond yields makes these traditionally safer investments more attractive than riskier assets like cryptocurrencies. As a result, capital is shifting away from speculative investments like Bitcoin, adding pressure to the crypto market.

Federal Reserve’s Monetary Policy Adds to Market Uncertainty

Another key factor is the ongoing uncertainty surrounding the U.S. Federal Reserve’s monetary policy. According to the minutes from the Fed’s last meeting, interest rate cuts initially anticipated for 2025 might be fewer than expected. This revision has dampened investor sentiment, further affecting the liquidity in the crypto market, which typically benefits from a more accommodative monetary policy.

Strong U.S. Job Market Complicates Outlook for Crypto

The resilience of the U.S. job market adds another layer of complexity to the situation. With 8.1 million job openings in November, persistent inflationary pressure seems likely, reducing the chances of a swift easing in monetary policy. The Fed’s commitment to combating inflation could result in high interest rates for an extended period, a scenario that historically has been unfavorable for cryptocurrencies.

As the global economic landscape remains uncertain, the crypto market is bracing for more volatility in the near term.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.