Key Takeaways: Rising US bond yields challenge Bitcoin's appeal as a hedge, with the 30-year Treasury yield reaching 5.269%.
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Bitcoin faces volatility as 30-year Treasury yields near 5.27% high
Bitcoin held near $80,900 on Aug. 31 as 30-year US Treasury yields hit 5.269%, six basis points from a 20-year high, reviving fiscal sustainability concerns.
"As general advice, I suggest diversifying well in asset classes and countries that have strong income statements and balance sheets... underweighting debt assets like bonds, and overweighting gold and a bit of Bitcoin," Ray Dalio, founder of Bridgewater Associates, wrote on LinkedIn, forecasting a future US debt crisis.
The 10-year yield reached 4.76%, its highest since January 2025, while the 30-year yield touched 5.269% on the day. US Treasury Secretary Scott Bessent told CNBC he had "not bought anything yet" to shore up the long end of the curve, even as the Treasury plans to at least double its debt buyback transactions to $4 billion from September. US government debt stands near $40 trillion.
Higher yields typically reduce the relative appeal of risk assets like Bitcoin, as fixed income offers yield-seeking investors safer alternatives. A sustained break above $80,000 may depend on whether the Federal Reserve confirms that the risk of further rate increases has disappeared, with the next key support at the 50-week EMA of $77,269.
Bond Market Ignores Treasury Intervention
The Kobeissi Letter, a trading resource, said the bond market "appears to be completely ignoring the US Treasury." Bessent stressed he was "fine" with yields rebounding after the announcement, even as the 30-year yield came within six basis points of its highest since January 2007. US stocks remained red, with the S&P 500 and Nasdaq Composite trading around 0.4 percent lower as tensions over new US-Iran strikes filtered through to markets.
ETF Flows and Liquidations Shape the Move
US-domiciled digital-asset ETFs recorded $2.36 billion in net inflows last week, their strongest week since early October 2025, with Bitcoin-focused products attracting $537 million on Aug. 20 and $659 million on Aug. 21. Around $7.2 billion in leveraged positions were liquidated across all cryptoassets last week, according to Coinglass, driven largely by a short squeeze.
Bitcoin's daily RSI measured 70.7 on Monday, still in overbought territory, while trader and analyst Rekt Capital warned of a hidden bearish divergence on daily time frames. Month-to-date gains have neared 25 percent in Bitcoin's best August performance since 2017.
The macro story alone does not explain the speed of Bitcoin's move. Higher yields could push capital out of crypto into fixed income, and if the Federal Reserve fails to validate expectations of looser monetary policy, the leverage that accelerated the rally could work in reverse.
This article is for informational purposes only and does not constitute investment advice.
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