This is a technical analysis posted by Coindesk analyst and chartered market technician Omkar Godbole.
For nearly two years, the US 10-year Treasury yield has been caught in a curious mess reminiscent of the pattern seen in Bitcoin By the summer of 2024, it had not yet begun its record rally to more than $100,000.
At the heart of the story is the MACD monthly histogram, a widely-tracked momentum indicator that continues to yield, pointing to a fall in yield from December 2023.
However, contrary to the Bearish MACD reading, fed rate cuts and continued clamor for more abstinence, the yield held firm around 4%, the 23.6% Fibonacci retracement of the multi-decade downtrend that ended in 2020-21, trading within a narrow range that traces a triangular triangle.
The divergence features an underlying bullish framework in yield, reflecting the strength of the bears. (Bond prices and yields move in opposite directions). Such a setup usually leads to a sudden continuation of uprisings and a rapid rally, in this case, a hardening of the yield.
Supporting this theory, the 50-, 100-, and 200-month simple moving averages (SMA) are stacked in textbook bullish order one above, acting as layered floors, indicating the path of least resistance for yield is on the higher side. Such an adjustment last occurred in the 1950s, following which the yield began a near three-decade upsurge.
Moreover, the Ichimoku Cloud. Again, this is the first time since the 1980s that the yield has established a foothold above the cloud.
These things taken together suggest a higher probability of the yield breaking above the 2023 high of 5.02% and potentially rising to 6.25%, which is the 38.2% Fibonacci retracement of the multi-decade downtrend.
A modified upswing in the benchmark yield, which represents the so-called risk-free rate, can weigh on risk assets, including cryptocurrencies.
Like Bitcoin
The divergence between the US 10-year Treasury yield and the persistently bearish MACD resembles a setup we saw on Bitcoin’s weekly chart in mid-2024.
After that, Bitcoin ranged between $55,000 and $70,000 despite the continued negative MACD reading. As Coindesk highlighted at the time. Later, the MACD crossed above zero in October, paving the way for a sharp and sustained rally that brought BTC above $100,000 in the months that followed.
This pattern illustrates a basic principle: technical indicators, such as the MACD, can lag behind price action, and markets often build strength beneath the surface before breaking.
