Bitcoin price continued to consolidate as investors focused on rising near-term bond yields. The BTC/GBP pair was trading at 19,541 on Thursday morning, a few points lower than last month’s high of 21,000. During the same period, the BTC/USD pair has been fluctuating at the 23,000 level. ETH/GBP is floating around 1,400, lower than last month’s high of 1,450.
UK bond yields are rising
BTC to GBP price traded in a tight range as investors focused on the bond market. Bond yields have risen significantly in recent months. In the United States, the 10-year Treasury yield has hovered near 4%, its highest level since last year. Additionally, 2-year Treasuries have moved nearly 5%, meaning the yield curve is heavily inverted.
The situation is better in the UK, where the yield on two-year bonds is 3.6%, while the 10-year has risen to 3.8%. Still, these returns are at their highest levels in months. The main reason for their elevated prices is the fact that central banks have maintained their hawkish tones.
On Wednesday, the Bank of England (BoE) governor said the bank was nearing its growth cycle. Nonetheless, he warned that the bank would not hesitate to tighten its screws to bring inflation down to its two-year target.
Bitcoin price tends to underperform during times of high interest rates, as we saw in 2022. With bond yields rising, particularly in the US, this means people can earn a 5% yield risk-free. Although this return is negligible, it is considerably high for large institutional investors.
March will be an important month for BTC as the Federal Reserve, the European Central Bank (ECB) and the Bank of England (BoE) are set to hold a meeting. Analysts expect these banks to maintain rate hikes as inflation remains at elevated levels.
BTC/GBP forecast
BTC/GBP chart by TradingView
The 4H chart shows that the BTC/GBP rate has been in a consolidation phase for the past few days. During this period, it is hovering slightly below the 20,000 resistance level. It also trades at the 25-day and 50-day moving averages. Looking at the oscillators, the MACD and the signal line have formed a bullish divergence, while the Relative Strength Index (RSI) has moved slightly below the neutral point at 50.
Therefore, BTC to GBP price is likely to stay within this range and then see a bearish breakout as sellers target the ascending trend line shown in black at 18,000. A move above 20,500 will invalidate the bearish view.
The outlook after Bitcoin (BTC/GBP) as the peak of BOE rate hikes first appeared on Invezz.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.