Bitcoin (BTC) is entering what former BitMEX CEO Arthur Hayes refers to as “up only mode,” as a worsening crisis in the US bond market potentially shifts investors away from traditional safe havens and towards alternative assets.
Declining trust in US policies raises Bitcoin’s potential
On April 11, the benchmark US 10-year Treasury yield climbed above 4.59%—reaching its highest mark in two months.
Daily performance chart of US 10-year Treasury note yields. Source: TradingView
The $29 trillion US Treasury market has seen more than a 2% decline this week — its most significant drop since September 2019, when a liquidity issue in the repo market compelled the Federal Reserve to step in.
Unpredictable tariff announcements and reversals from US President Donald Trump have contributed to the turmoil. After initially threatening sweeping tariffs on global trade partners, Trump retracted many measures within days for specific countries, with the exception of China.
The US dollar faced additional strain, with its strength against a basket of leading foreign currencies—as indicated by the US Dollar Index (DXY)—falling below the 100 mark for the first time since 2022.
Daily performance chart of the US Dollar Index. Source: TradingView
This further contributed to its worst weekly decline in over two years.
In contrast, Bitcoin experienced a surge of over 4.50% amid the tumult in the US bond market, climbing to around $83,250 on expectations that deteriorating macroeconomic conditions will prompt US policymakers to take action.
“It’s on like donkey kong,” Hayes stated in his April 11 post on X, adding:
“If this trend continues, we will see more policy responses this weekend. We are about to enter UP ONLY mode for $BTC.”
Additionally, bond traders are now anticipating at least three interest rate cuts from the Federal Reserve by the end of the year, with a fourth becoming increasingly plausible. Historically, rate cuts have been favorable for Bitcoin.
Probabilities for the target rate at the December Fed meeting. Source: CME
Bitcoin anticipates a ‘parabolic bull run’ due to a weaker dollar
Historically, significant drops in the US Dollar Index have been followed by delayed but substantial Bitcoin bull runs, according to crypto analyst Venturefounder.
“A declining DXY has often been a strong bullish indicator for Bitcoin,” the analyst noted on X, highlighting a distinct bearish divergence on the chart.
Monthly price chart of DXY vs BTC/USD. Source: TradingView/Venturefounder
He further stated that if the DXY continues to decline toward the 90 level, it could recreate the conditions that led to parabolic BTC rallies in the later stages of previous bull markets — each lasting up to a year.
Additionally, John Bollinger, the creator of Bollinger Bands, expressed a bullish sentiment for Bitcoin, indicating that the cryptocurrency is forming a familiar bottom around the $80,000 mark.
Related: Bitcoiners’ ‘bullish impulse’ on recession may be premature: 10x Research
Meanwhile, a developing falling wedge pattern on the BTC price chart suggests a potential price rally towards $100,000, as Cointelegraph previously reported.
This article does not provide investment advice or recommendations. All investments and trading involve risks, and readers should conduct their own research before making decisions.
