Markets The bond market is signaling potential challenges for a short-term rise in Bitcoin prices.
The bond market indicates complexities for the near-term Bitcoin bullish trend.
By Omkar Godbole Updated Jun 18, 2026, 7:48 a.m. Published Jun 18, 2026, 7:08 a.m. 3 min read Make preferred on ShareShare this articleCopy link X (Twitter) LinkedIn Facebook Email Make preferred on
Bonds are signaling a clear trend regarding interest rates. (GoranH/Pixabay)SummaryShow- The U.S. Treasury yield curve is sharply flattening, with the gap between the 10-year and 2-year yields at its narrowest since April 2025, indicating a more aggressive Federal Reserve stance.
- Expectations for prolonged high interest rates are enhancing the appeal of fixed-income assets compared to non-yielding assets like Bitcoin.
- The Federal Reserve's latest forecasts suggest that interest rates will remain elevated through 2028, complicating the outlook for a near-term Bitcoin bull market.
Recent developments in the bond market indicate a shift that could negatively impact risk assets, including Bitcoin BTC$64,010.98.
The spread between the 10-year and 2-year U.S. Treasury yields has contracted to only 28 basis points, the tightest margin since April 2025, as reported by TradingView.
This situation, referred to as yield curve flattening, is sending "the clearest market signal that the Fed is adopting a more hawkish approach," according to Skanda Amarnath, executive director of EmployAmerica, a policy research organization focused on monetary, fiscal, and industrial policies.
A hawkish Federal Reserve typically translates to higher and sustained interest rates, which is unfavorable for Bitcoin and similar non-yielding assets. As expectations of rising interest rates solidify, fixed-income investments become comparatively more desirable, often diverting capital from riskier assets like cryptocurrencies.
Moreover, the flattening trend is not limited to the 10 and 2-year yields; the difference between the 30-year and 5-year yields has also decreased to its lowest point since April of the previous year.
This marks a significant reversal from earlier in the year when the yield curve was steepening, indicating that markets were anticipating interest rate cuts, which had previously supported risk assets, including cryptocurrencies. That supportive environment now appears to be diminishing.
Understanding the Importance of the Curve
Bonds play a crucial role in transmitting monetary and fiscal policies to the markets and the economy. Consequently, changes in the bond market's yield curve or spreads often provide clearer and more reliable indications of forthcoming policy shifts than individual analyst opinions.
The two-year yield closely aligns with expectations for the Fed's near-term policy, while the 10-year yield reflects market perceptions regarding long-term growth and inflation.
Typically, the curve slopes upward, as investors seek additional compensation for locking their funds for extended periods, resulting in the 10-year yield being higher than the 2-year yield.
A narrowing gap usually indicates either that investors anticipate prolonged higher interest rates, keeping the two-year yield elevated, or that they are becoming more pessimistic about long-term growth, leading to a decrease in the 10-year yield.
At present, the trend appears to align with the former interpretation, particularly following Wednesday's Fed meeting, where the central bank opted to maintain interest rates but conveyed a hawkish outlook.
New Fed Chair Kevin Warsh noted the committee's commitment to achieving price stability, while the updated dot plot indicated higher future rates than previously anticipated. The median projection for 2026 increased to 3.8% from 3.4% in March, for 2027 it rose to 3.6% from 3.1%, and for 2028, it shifted to 3.4% from 3.1%.
The committee showed notable divergence in their forecasts. One member anticipated a rate cut, eight members expect rates to remain steady, three foresee one rate hike, five predict two hikes, and one member projects three hikes.
In summary, these indicators suggest that achieving a bullish resurgence in Bitcoin may be a challenging task, potentially keeping the cryptocurrency under pressure for an extended period. This aligns with the widely discussed four-year halving cycle theory, which suggests a possible bottom around October.
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CEX Volumes Drop to Lowest Since September 2024 as RWA Perps Hit Record High
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In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.
By CoinDesk ResearchJun 15, 2026In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.
Why it matters:
In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.
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