Bitcoin Hovers Near $77,000 as Global Bond Selloff Tests Post-rally Resilience

Bitcoin clung to the $77,000 level on Tuesday as a coordinated selloff in government bonds across the U.S., Europe, and Japan rattled traditional markets, putting the cryptocurrency’s recent rally to the test. The digital asset traded at $76,850 at press time, down roughly 1.2% over the past 24 hours, but still well above the psychological $75,000 floor that has held since last week’s push above all-time highs. The Bond Market Shockwave The global bond rout accelerated after stronger-than-expected U.S. manufacturing data and hawkish comments from Federal Reserve officials revived fears of persistent inflation. The yield on the benchmark 10-year U.S. Treasury note surged 14 basis points to 4.72%, its highest level since November 2023. German Bund yields rose 9 bps to 2.58%, while Japanese Government Bond (JGB) yields hit a 13-year peak at 1.45%. Asset Class / Benchmark Previous Yield Current Yield Change (bps) Market Driving Factor U.S. 10-Year Treasury 4.58% 4.72% +14 Strong ISM Manufacturing PMI (52.1 vs. 49.8 expected) German 10-Year Bund 2.49% 2.58% +9 ECB rate-cut uncertainty, energy price spike Japan 10-Year JGB 1.38% 1.45% +7 BOJ taper signal, wage growth data Bitcoin Spot Price $77,800 $76,850 -1.2% Risk-off rotation, liquidations spike Bitcoin’s Resilience Under Scrutiny Despite the bond-driven risk-off sentiment, Bitcoin has shown relative strength compared to equities. The S&P 500 fell 1.8% and the tech-heavy Nasdaq Composite dropped 2.4% in the session, while Bitcoin’s decline remained contained within a narrow range. Analysts pointed to continued institutional inflows and a tightening supply dynamic as counterweights to macro headwinds. “Bitcoin is being tested as a ‘risk-on’ asset in this environment, but the fact that it hasn’t broken below $75,000 suggests strong bid support from long-term holders and ETF buyers,” said Michelle Tan, head of digital asset research at Lumina Capital. “The bond selloff is a real stress test for the narrative that Bitcoin is a macro hedge.” Data from on-chain analytics firm Glassnode confirms the resilience: Exchange balances continue to decline, reaching a 6-year low of 2.28 million BTC Spot ETF net inflows totaled $1.2 billion over the past week - the highest weekly level since January Open interest in Bitcoin futures fell only 3% to $24.8 billion, signaling no panic deleveraging Why Global Bonds Are Dumping The coordinated nature of the bond selloff has raised alarms among traditional investors. Three key catalysts are converging: U.S. data resilience: The ISM Manufacturing Index jumped into expansion territory for the first time in 16 months, reigniting bets that the Fed may delay rate cuts. ECB pause signals: European Central Bank President Christine Lagarde hinted that rates could stay higher for longer if wage growth remains sticky. BOJ normalization: The Bank of Japan’s cautious approach to unwinding its yield curve control program is driving JGB yields upward, triggering repositioning in global carry trades. The resulting spike in real yields (nominal yields minus expected inflation) has historically been a headwind for risk assets, including cryptocurrencies. Yet Bitcoin’s correlation to the 10-year Treasury yield has weakened in 2024, dropping from -0.45 to -0.22 over the past three months, according to data from CoinMetrics. Institutional Positioning Remains Bullish While retail sentiment has cooled slightly, institutional flows tell a different story. Coinbase Prime data shows that institutional clients increased Bitcoin allocations by 4.3% in the past week, even as the bond selloff deepened. “We are seeing clients treat this as a dip-buying opportunity rather than a reason to exit,” said a Coinbase trading desk note reviewed by our newsroom. Investor Segment 7-Day Net Flow Position Change Key Observation Spot BTC ETF holders +12,400 BTC +1.6% BlackRock IBIT alone absorbed 8,200 BTC Coinbase Prime institutional +6,800 BTC +4.3% Long-term custody accounts increasing Binance retail -3,200 BTC -0.9% Small profit-taking seen above $78k CME futures basis traders +$1.1B notional +2.1% Basis trading remains attractive What to Watch Next Market participants are now focused on the upcoming U.S. Consumer Price Index (CPI) report scheduled for release on Wednesday. A higher-than-expected inflation print could exacerbate the bond selloff and put additional pressure on Bitcoin, potentially testing the $75,000 support. Conversely, a mild CPI reading could trigger a rapid reversal and push Bitcoin back toward the $80,000 resistance level. “The next 48 hours are critical,” said Tan. “If Bitcoin can hold above $76,000 through the CPI print, it will signal that the market has already priced in the bond rout. A breakdown below $75,000 would likely trigger a fast move toward $72,000.” What Happened with Bitcoin Today? Bitcoin fell about 1.2% to trade near $76,850 as a global bond selloff drove yields sharply higher. The decline was milder than in equities, with Bitcoin showing relative strength due to continued institutional inflows and low exchange balances. Why Are Global Bond Yields Rising So Quickly? Bond yields surged after strong U.S. manufacturing data, hawkish ECB comments, and rising Japanese bond yields triggered a coordinated selloff. The 10-year U.S. Treasury yield jumped 14 basis points to 4.72%, its highest since November 2023. Is Bitcoin a Safe Haven or a Risk Asset During Bond Selloffs? Bitcoin's correlation to bond yields has weakened, but it still behaves like a risk asset in sudden macro shocks. However, its supply scarcity and institutional demand have provided a floor, limiting drawdowns compared to equities. Could Bitcoin Drop Below $70,000 If Bond Yields Keep Rising? A break below $75,000 is possible if the bond selloff accelerates, especially after a hot CPI print. The next major support is around $72,000, where the 50-day moving average and significant on-chain cost basis converge. What Role Are Bitcoin ETFS Playing in This Market? Spot Bitcoin ETFs, particularly BlackRock’s IBIT, have absorbed over 12,400 BTC in the past week, acting as a demand buffer. ETF inflows have offset retail selling and helped stabilize Bitcoin’s price during the bond-driven risk-off move.