.png){kind=logo}
Bitcoin’s rebound is facing a fresh test as Japanese bond yields climb to levels not seen in three decades. The move has pushed global borrowing costs higher and added pressure on risk assets, including Bitcoin.
BTC traded near $63,300 after recovering from a sharp Monday sell-off. The recovery came after futures liquidations, spot buying and reduced expectations for higher US interest rates helped stabilize the market. However, traders now face a new question: Can Bitcoin hold its rebound while global yields rise?
Japanese government bond yields have moved sharply higher in July. The 10-year JGB yield rose to 2.85%, its highest level in 30 years. It has added 18 basis points since the start of the month, raising concerns across major developed markets.
The move has also lifted US Treasury yields. The US 10-year Treasury yield is testing 4.5% for the first time in nearly a month. Meanwhile, Germany’s 10-year bond is moving near 3%, while the UK 10-year gilt is close to 4.8%.
Japan kept global yields low for many years through near-zero interest rates and heavy bond purchases. That policy helped support yen-funded carry trades, where investors borrowed cheap yen and bought higher-yielding assets overseas.
Now, rising Japanese yields may reduce that support. Higher bond yields can make fixed-income assets more attractive. Bitcoin does not pay interest, so rising yields can raise the cost of holding BTC instead of government bonds.
Bitcoin found support near $58,000 on July 1 and later climbed toward $64,000. The move followed a softer tone on US inflation and weaker jobs data, which pushed traders to cut expectations for higher US rates.
Fed Chair Kevin Warsh said on July 1 that inflation posed less risk than it had weeks earlier. After that, the June nonfarm payrolls report showed the US added about half the number of jobs forecast. The labor force participation rate also fell to 61.5%, its lowest level in more than five years.
Those data points helped risk assets recover. Bitcoin rose nearly 8% in less than seven days, supported by rate-cut hopes and stronger short-term demand. However, the rise in global bond yields now threatens that relief.
Still, not all market views point to stress. Goldman Sachs expects the yen to keep weakening and still prefers yen-funded carry trades. That view shows the market is split, with “doubts” around whether rising Japanese yields will fully unwind global risk appetite.
Bitcoin also faced pressure from Strategy’s disclosed sale of 3,588 BTC. The company sold about $216 million in Bitcoin to fund dividend payments on preferred securities. The filing triggered a sharp reaction after BTC had already climbed toward $64,000.
The earlier move toward $64,000 was largely futures-driven. Net futures buying reached about $415 million on Sunday, while spot flows were slightly negative. That made the rally more exposed to a fast unwind.
Later, Bitcoin recovered as futures buying returned. The rebound also included about $143 million in spot buying, which gave the move broader support than Sunday’s futures-led rally. BTC was up 0.72% over 24 hours at about $63,301.65.
Liquidations also played a major role in the cryptocurrency market moves. Bitcoin liquidations jumped 279.73% to $236.38 million in 24 hours. That forced traders to close leveraged positions and helped drive a short squeeze.
For now, BTC is trading inside a tight range. A hold above $62,000 could allow another test of $65,000. A drop below $62,000 may expose $60,000, while a deeper move could bring $59,500 back into focus. Traders are also watching the Fear & Greed Index, which currently stands at 28 and signals ‘Fear.’
Also Read: Bitcoin Holds Near $60,700 as Fed Comments Lift Crypto Sentiment
