Bitcoin’s Wild Ride: Treasury Chaos, Fed Panic, and a $100K Dream 🚀

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In the grand theater of financial markets, where fortunes are made and lost in the blink of an eye, Bitcoin (BTC) has once again taken center stage. Today, it is up a modest 0.24%, trading at $76,481 in the early Asian session, attempting to recover from Tuesday’s 3.71% plunge. Meanwhile, the US Treasury market is in disarray, with the 10-year yield soaring to 4.5% and the 30-year yield hitting 5%. Some whisper of a $2 trillion basis trade unwind, while others point fingers at China selling treasuries. Amidst this chaos, the Federal Reserve is rumored to be considering an emergency rate cut, a move that could send crypto investors into a frenzy and spark a bullish reversal for Bitcoin’s price. 🎭

Why The Treasury Market Meltdown Matters for Bitcoin

The specter of Donald Trump’s trade war with China looms large, as the 10-year yields have surged 17.16% from a low of 3.840% to 4.499% in just 72 hours. Meanwhile, Bitcoin has clawed back 2.53% in the last four hours, trying to erase the scars of yesterday’s losses. 📉

ZeroHedge, ever the harbinger of doom, has dubbed this an “absolutely spectacular meltdown,” with the basis trade blowing up and sparking a multi-trillion dollar panic. In a follow-up tweet, they ominously declared, “This is what the collapse of the $2 trillion basis trade looks like.” 💥

The basis trade unwind is a leveraged forced-selling spiral—when it occurs, Treasury prices plummet (yields rise) rapidly, even in a risk-off environment where bonds would typically rally. This is why Treasuries are losing their safe-haven appeal amidst the trade war turmoil. 🎢

With such a steep climb in long-dated yields, Gold bug Peter Schiff warns,

“Without an emergency rate cut tomorrow morning and the announcement of a massive QE program, tomorrow could be a 1987-style stock market crash.”

Fed Panic Trade Goes Viral: May Rate Cut Odds Soar 500%

It remains to be seen whether the Fed will convene an emergency meeting to address the unusual spike in treasury yields. However, the markets are already pricing in a rate cut. According to the CME Fed Watch Tool, the probability of a rate cut in May has jumped from 10.6% a week ago to 58.9% today. 📈

Bitcoin Price Forecast: Two Scenarios

Should the Fed hold an emergency meeting today and cut interest rates, it could trigger a massive buying spree among investors, catalyzing a recovery rally for Bitcoin’s price and the broader crypto market, thus ending the ongoing bear rally. The key levels to watch if BTC price rallies include $81,200, $84,150, and $90,000. A flip of $90K into a support level would signal a paradigm shift favoring the bulls. This development paves the way for a bullish Bitcoin price prediction with a target of $100K and potentially a new ATH. 🚀

On the other hand, if the Fed holds steady, there could be more pain for both the stock and the crypto markets, with Bitcoin price potentially dipping into the $70K region. 📉

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2025-04-09 10:28