After almost two years to go, Bitcoin lost its correlation with US 10-year bond yields. But now the two are surging simultaneously
Economist and Bitcoin (BTC) researcher Jan Wüstenfeld, one of the top authors of CryptoQuant’s Quicktake newsletter by leading on-chain data vendor CryptoQuant, notices an interesting pattern of correlation between Bitcoin (BTC) price and the United States 10-Year Bond Yield rates.
Is the decoupling complete?
According to charts shared by Mr. Jan Wüstenfeld, in December 2021, Bitcoin (BTC) and US 10-year bond yield rates (US10Y or TNX) lost their correlation with each other.
Typically, in this bullish rally, Bitcoin (BTC) closely followed the US10Y rates indicator. However, in December 2021, this correlation vanished. Bitcoin (BTC) price was decreasing, while the US10Y rates spiked to multi-month highs over 1.8 percent.
However, after Bitcoin (BTC) touched its local low at $32,950, both metrics turned back up. Now, US10Y rates are at their highest since July 2019.
US10Y have been surging since late July 2020. By printing time, the indicator holds above 1.9 percent.
Both will likely rise: Economist
Market analyst and economist Caleb Franzen has also spotted the end of “decoupling” and is sure that the new upsurge in both indicators is far from over:
As I’ve been saying, my expectation for these 2 variables to converge, likely by seeing both move higher. In that scenario, #Bitcoin has a lot of catching up to do.
“Decoupling”, i.e. the situation where Bitcoin (BTC) loses its correlation with certain traditional assets is widely used as a trend indicator for the flagship cryptocurrency.
For instance, the most impressive phase of its latest bullish rally started by BTC/XAU decoupling in August 2020.
