The price of Bitcoin (BTC) dipped below $56,000 on March 21 after repeated rejections by the $60,000 resistance level throughout the past four days.
Despite getting closer to cleanly breaching past the key technical level, Bitcoin has been showing weakness in the $59,000 to $60,500 range.
There are three major reasons behind the stagnation: the rise in Treasury yields, bearish movements on Bitfinex, and the struggle of the risk-on market.
High U.S. Treasury yields cause risk-on markets to slump
When the 10-year U.S. Treasury yield rises, the appetite for risk-on assets tends to drop because investors can seek safer yield-generating alternative in Treasury bonds.
Although Bitcoin has not seen tight correlation with the Dow Jones, it has seen close correlation with tech-heavy indices, like the S&P 500.
This suggests that the strong momentum of the U.S. Treasury bonds is leading risk-on assets to stagnate, bringing down Bitcoin’s momentum in tandem, as Cointelegraph previously reported.
The U.S. Treasury yields began to break out above key levels starting March 19. Since then, Bitcoin has been consolidating, struggling to rise above $60,000.
Holger Zschaepitz, a market analyst at Welt, said:
“Treasury yields breached more key levels as bond traders boosted bets that the Fed will allow inflation to overshoot as US economy recovers. 10y yields top 1.75% w/ING sees ‘no real barrier’ for move higher.”
For Bitcoin to see a sustainable rally, it needs to see a favorable macro landscape, which would only be possible through the stabilization of U.S.Treasury yields.
Selling pressure on Bitfinex at $60K resistance
According to a pseudonymous Bitcoin trader and technical analyst known as “Byzantine General,” there has been serious selling pressure on Bitfinex.
Other derivatives trading platforms, like Deribit, FTX, and BitMEX also saw decent short interest,…