10-Year UST Yields Pressure Bitcoin: Strategists Anticipate Further Decline

The yield on 10-year UST remains one of the main factors pressuring Bitcoin and the entire crypto market: Wolfe Research believes that rising rates, a strong US Dollar, and weak performance of risk assets hinder cryptocurrencies from achieving a sustainable recovery.

Over the past two weeks, the digital asset market has hardly moved. Prices continue to trend downward, and attempts at growth appear less convincing than the rallies observed earlier in 2026. This was noted by Wolfe Research strategists Rob Ginsberg and Reid Harvey.

According to their assessment, it is becoming increasingly difficult to find a strong argument for a quick turnaround in cryptocurrencies. The strategists stated outright that in the short and medium term, they find it hard to formulate a sustainable bullish scenario for this asset class.

Ginsberg and Harvey point out that cryptocurrencies have failed to capitalize on general risk demand, the rise in geopolitical tensions, or the fact that inflation has once again become a notable topic for the markets. These factors have not altered the sector's trajectory, and it remains unclear what specific driver could turn the situation around.

The key source of pressure, according to the strategists, is interest rates and the dynamics of the US Dollar. Breaking this pressure down into several parts, the picture looks like this:

• Interest Rates: The higher the real rates, the less support risky assets receive.
• US Dollar Dynamics: A strong US currency typically complicates the recovery of the crypto market.
• Real Rates: Bitcoin, according to the strategists' observations, often moves in reverse correlation with them.
• Geopolitical Tensions: Even rising tensions have not helped cryptocurrencies turn upward.
• Inflation: The return of inflation to the market agenda has not yet become a growth driver.

The yield on 10-year UST is influenced not only by the rates themselves. The market is also watching inflation, signals from the Federal Reserve, macroeconomic data, and the balance of supply and demand for bonds.

The rise in long bond yields traditionally hits assets with higher risk. However, this time, analysts believe the main blow has fallen specifically on Bitcoin and cryptocurrencies. As long as the yield on 10-year US Treasury securities continues to move towards 5%, this factor is unlikely to disappear quickly.

For investors, this means that each high-yield bond becomes a more noticeable alternative to risky assets. If the Federal Reserve maintains a hawkish stance or the market prices in higher real rates, investments in cryptocurrencies receive less support from liquidity and risk appetite.

Speaking of Bitcoin, Wolfe Research strategists described the current picture quite starkly: the downward trend remains in force. Even a month of sideways movement, in their opinion, has not been a sign of a confident recovery. The baseline scenario suggests that the next notable movement will be downward.

Analysts also allow that the largest cryptocurrency may not gain enough momentum this time even to enter the overbought zone. This, they estimate, indicates weakness among buyers: attempts to organize a new rally have essentially fizzled out.

Regarding Ethereum, Wolfe Research expects similar dynamics. The strategists consider a new decline likely, with the price potentially falling below the $2,000 mark.

Separately, the broker continues to monitor the four-year Bitcoin cycle. The current drawdown has reached 53%, while historically, the average decline in similar cycles has been around 80%. Considering the average durations of past cycles, Reid Harvey suggests that a bottom may form around October.

At the same time, a negative view on cryptocurrencies themselves does not mean a complete abandonment of the sector. The strategists prefer long positions in stocks of companies related to the crypto industry rather than in tokens. Even the recent correction of these stocks, in their opinion, does not change this approach.

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