Bitcoin remains stable around $69,000 despite the risk-off environment in Europe. Meanwhile, Britain’s leading stock market index, FTSE 100, declined due to the impact of rising bond yields. While the sharp rise in 10-year government bond yields in London usually brings about an outflow from risky assets, this time it seems that Bitcoin has separated from the classical financial world.
High Bond Yields and Stock Falls in European Markets
The FTSE 100 lost more than 1 percent today, revealing investors’ reaction to rising bond yields. Similarly, larger declines were observed in the leading stock market indices of Germany and France. In this atmosphere, there are often sharp sales in both stocks and cryptocurrencies. However, this time, although the shares of energy and industrial companies in the UK remain in the background, the crypto market continues to show resistance.
It is known that the Bitcoin price is often affected by volatility in the bond market. However, today’s selling wave in the FTSE 100 and the jump in bond yields do not create as significant selling pressure in the crypto market as in the past. On the other hand, it is observed that the tension experienced in traditional markets has limited reflection on the crypto asset market.
Correlation Between Bitcoin and FTSE 100 Weakened
Recently, the relationship between Bitcoin and the FTSE 100 index has weakened. Market players state that Bitcoin moves mainly with its own dynamics in the short term. The increase in institutional interest in spot ETFs, in particular, provides a balance on the demand side in the crypto market.
Strong inflows into spot Bitcoin ETFs are helping the price remain strong despite volatility in traditional markets. In the market where leverage has been cleared in recent days, the fact that investors who sell short in futures transactions have to close their short positions (short squeeze) stands out as a factor supporting the rise.
Due to institutional demand, the Bitcoin supply on exchanges is rapidly decreasing. The low supply prevents the negativity in the stock market from creating a direct sudden selling pressure on crypto prices. According to analysts, the absorption of daily issuance by large ETF operators such as BlackRock may enable this divergence to continue.
Critical Level and the Search for Direction in the Crypto Market
Market technical indicators indicate that the $74,000 level is an important resistance point for Bitcoin. If buyers breach this level, it could indicate that the rise in bond yields has less impact on crypto pricing in the short term. On the other hand, if it falls below $ 71,000, Bitcoin is expected to move in parallel with the downward movements in the stock markets again.
Global markets are focused on the course of US 10-year bond yields at the opening today. If there is a sudden increase in bond interest rates on the US side, testing of critical supports in Bitcoin price may come to the fore.
The increase in transaction volume with the opening of Wall Street later in the day will determine whether Bitcoin’s strong stance, which was observed in the morning hours, will continue. If inflows into ETFs do not weaken, there is a possibility that the crypto market will move largely independent of movements in the bond market.
