The US Treasury market is currently experiencing its highest volatility in four months, which puts the expected recovery in Bitcoin (BTC) prices at risk. Recent inflation data from the United States showed lower-than-expected growth for February, strengthening the argument for potential interest-rate cuts by the Federal Reserve. Analysts are optimistic, projecting Bitcoin could climb to $90,000 and beyond.
Increased volatility often leads to reduced risk-taking in financial markets, as seen through the rising Merrill Lynch Option Volatility Estimate Index (MOVE). This index recently soared to 115, marking the highest level since November 6, 2023.
‘With inflation cooling and recession fears still looming but not worsening, Bitcoin could be on the verge of its next major breakout, pushing past the stubborn sub-$90K range,’ said Matt Mena, Crypto Research Strategist at 21Shares.
The dynamics of the U.S. Treasury notes heavily influence global finance, and the ongoing volatility can negatively impact leverage and liquidity across various markets. This situation can hinder financial risk-taking and slow down potential price recoveries for cryptocurrencies like Bitcoin.
BTCUSD vs MOVE. (TradingView/CoinDesk)
The volatility observed in the Treasury market is anticipated to have implications for Bitcoin prices as traders respond to changing economic indicators.
