Bitcoin is front-running the real yield

  • BTCUSD
    (${instrument.percentChange}%)


Source: www.tradingview.com

The top chart shows bitcoin's weekly chart, the bottom chart is the US10-year real rate. Bitcoin is showing strength as real rates moderate.

BTCUSD has charted a higher trough (HT) followed by a higher peak (HP). This is a defined uptrend. As it charted on the weekly time frame, the cryptocurrency's primary trend is up.

It is front running the real rate, which has not completed a trend reversal. I.e. we are still waiting for the 10-year real rater to chart a lower trough. This will only happen once the real rate drops below the black horizontal line on the lower chart. Bitcoin participants expect this.

The emergence of the uptrend coincides with risk asset strength and expected Fed pivot. Much of the fear that surrounded bitcoin and cryptos has evaporated. It is trading at levels prior to the FTX collapse. There is hope the worst is over.

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As long as the higher trough, higher peak pattern persists, BTCUSD's uptrend will continue.

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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