High Bond Yields & Weak Dollar Actually Bullish For Crypto?

Crypto

High Bond Yields & Weak Dollar Actually Bullish For Crypto？

• US tariff policies trigger sharp bond yield surge, market uncertainty follows
• Feds Kashkari notes foreign investors “pulling back” as US haven status questioned
• High yields vs potential easing creates crucial test for crypto direction

Sharp moves in the US economy following President Trumps tariff announcements have captured trader attention. Bond yields are spiking; the dollar is wobbling, and traders are now expecting a spillover into the crypto market as well.

On April 2, Trump called for a blanket 10% tariff on all US imports. Although he softened his tone and stance later in the week, the message to markets was clear: global trade tensions are back on the table with China facing 125% tariffs. The announcement set off rapid selling in US Treasuries, pushing the benchmark 10-year yield up by a considerable 50 basis points within days.

Market Reactions: Kashkari Notes Investor Pullback, Fed Holds Steady

This is one of the sharpest moves in recent decades. Minneapolis Fed President Neel Kashkari commented on the fallout, noting that international investors are “pulling back from US assets.” This is a sign that Americas reputation as a safe haven may be faltering.

Interestingly, the Federal Reserve has chosen to stay on the sidelines, signaling no urgency to adjust rates despite the volatility.

A Double-Edged Sword for Crypto: Bull & Bear Cases Emerge

With the US Dollar weakening and bond-yield spiking, there are two scenarios that could present itself for the crypto market:

The Bullish Argument:

• As the dollar weakens, cryptocurrencies become more attractive as alternative stores of value.
• Higher bond yields may tighten conditions initially, but could eventually lead to a more dovish Fed if markets seize up, increasing liquidity.
• In times of monetary uncertainty, Bitcoin often benefits from its “inflation hedge” narrative.

The Bearish View:

• Some investors may avoid volatile assets and retreat into traditional “safe” instruments like US Treasuries, especially if equity markets continue to correct.
• If bond and stock markets move in tandem and signal a deeper economic fissure, speculative assets like crypto could see sharp outflows.

Bond-Yield Soars, Market Cap Analysis and Targets

The current total crypto market cap is hovering at approximately $2.64 trillion, slightly above the 0.618 Fibonacci retracement level ($2.64 trillion), a crucial resistance point. Holding this level is very important.

Also, a break above $2.75 trillion, which aligns with the 0.786 Fib level, could signal renewed momentum and open the path to $2.85 trillion and beyond, potentially confirming the bottom.

Meanwhile, the MACD indicator shows signs of a bullish crossover, with the histogram flipping green and momentum shifting favorably. A short-term rally could be brewing.

However, a failure to hold current levels, particularly a drop below the 0.5 Fib level (~$2.52 trillion), could see the market revisit lower support zones near the recent cycle low of $2.3 trillion.