Bitcoin Slides 5%, Touches $95,000 Mark: Why Is BTC Going Down?

Bitcoin BTC/USD continues to slide following Tuesday’s stronger-than-expected December Purchasing Managers' Index reading, with analysts attributing the sharp price decline to fallout in the bonds market.

What Happened: It trades around the $95,400 mark after having touched $102,000 on Monday, down 5.3% over the past 24 hours.

Prominent analyst Benjamin Cowen owen emphasized in his podcast update on Tuesday that Bitcoin’s recent decline “isn’t so bad” in the broader context.

Cowen elaborated on how the 10-year Treasury yield impacts Bitcoin and other risk assets, highlighting that significant yield increases have coincided with Bitcoin bear markets, including those in 2014, 2018 and 2022.

By overlaying Bitcoin's price chart with the yield chart, he demonstrated this correlation.

“When the 10-year yield tops, Bitcoin finds the bottom,” Cowen explained, adding that Bitcoin generally rises when the yield declines.

Recent upward movements in the yield, however, have coincided with Bitcoin sell-offs.

Looking forward, Cowen predicts the 10-year yield could peak in the first quarter before declining.

This shift might be triggered by a growth scare or weak labour market data.

Also Read: Bitcoin Is The ‘The Grand Daddy’ And Outshines Wall Street, Anthony Pompliano Says

Why It Matters: Cowen highlighted that the rising 10-year yield indicates the economy is still performing well.

"The fact that it's going up means the economy is still doing okay today because if the economy were not doing okay, the 10-year yield would be going down," he explained.

He also noted concerns about inflation potentially driving the yield increase.

For instance, the ISM Services Prices Paid index showed a significant rise in December 2024, suggesting renewed inflationary pressures.

The analyst concluded by stressing the complexity of economic forecasting and the need to consider multiple factors when interpreting market movements.

He warned of increased volatility in the days ahead as new labour market data emerges.

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