Bitcoin Price Will Likely Follow Treasury bonds and Gold Price Sentiments: Bloomberg
The world’s first cryptocurrency, Bitcoin had kicked off August month on a bullish note as the currency had reclaimed its $23,000 price level. However, today, the currency has once again lost its $23k price area and is hovering around the $22,000 mark.
At the time of writing, Bitcoin is pulled down by 0.23% and the currency is trading at $22,958. For the past few months, the flagship currency has been fluttering between the $22,000 and $23,000 price area.
It’s always been believed that Bitcoin and other cryptocurrencies react to the performance of stocks. However, the new study from the crypto market research firm, Bloomberg Intelligence claims that Bitcoin’s behavior has started to depend more on United States Treasury bonds and gold instead of stocks.
Bitcoin Price Action Is Based On The US Treasury Bonds
In the firm’s August report called Crypto Outlook, analyzed by senior commodity strategist Mike McGlone along with senior analyst Jamie Coutts has made a comparison between Bitcoin price action with gold, bonds, and oil.
As per the analysis, there is a correspondence between Bitcoin and that of the Treasury bond market more than US stocks. According to the authors, this is because of macroeconomic events like Federal Reserve’s interest rate hikes.
They are also of the opinion that the pump and dump nature of commodities and a decrease in the returns of bonds has increased the chances of correlation between bonds, gold, and Bitcoin.
Is the Flush Done? Booms, Busts and #Bitcoin vs. #Gold, #Bonds, #Oil — Whether the ebbing tide has subsided for most assets is the top binary issue for 2H, and in most scenarios, Bitcoin and Ethereum appear poised to come out ahead. Link to Pdf:— Mike McGlone (@mikemcglone11) August 3, 2022
The Treasury bonds or T-Bonds are referred to as long-term government debt securities that are issued by the US Treasury Department. These Treasury bonds have a fixed rate of return along with a specific maturity period between 20 to 30 years.
Though the flagship currency is lower than its ATH since the beginning of August, the analysts note that the currency is five times more than its March 2020 low. This depicts the currency’s potential.
The analysts claim that for Bitcoin $20,000 is the key support area and as per the experts the base is forming much stronger.Source