An analyst explained the event that could prevent the rise of Bitcoin and Altcoin prices in the near future!

According to Analyst James Van Straten, the cryptocurrency market, which experienced a strong rally in the fourth quarter of 2024, is facing overshadowing cryptocurrency prices by rising global bond yields.

Van Straten noted that government bond yields have risen globally in recent months, creating a challenging macroeconomic environment for risky assets such as cryptocurrencies. The widely accepted global benchmark, the US 10-year Treasury yield, has climbed to 4.70% as of today. This signifies a significant increase of over 100 basis points since the Fed initiated its first interest rate cut in September.

This trend is even more pronounced in the United Kingdom, where the 30-year Gilt yield reached its highest level since 1998 at 5.35% this week. This represents a 105 basis point jump since the Fed's policy change. Similar upward movements in bond yields were also observed in Germany, Italy, and Japan. In particular, Japan's 10-year government bond yield rose to around 1.18%, its highest level in about 15 years, despite historically low rates in the country.

Although these rising returns did not initially hinder the cryptocurrency rally, Bitcoin and other major digital assets reached record or multi-year highs in December and then the market calmed down. For example, Bitcoin lost more than 10% compared to its all-time high of $108,000 just three weeks ago, and some other major cryptocurrencies experienced even sharper declines.

China is a notable exception to this trend, with bond yields sharply falling due to increasing deflationary concerns. According to The Kobeissi Letter, China is currently experiencing its longest deflationary period since 1999, which contrasts with the inflation-focused yield increases seen elsewhere.