Sharp US Treasury Market Moves Capture Trader Attention, Potential Spillover Into Crypto

Bond yields are spiking; the dollar is wobbling, and traders are now expecting a spillover into the crypto market as well.

Sharp moves in the US economy following President Trump’s tariff announcements have captured trader attention. Bond yields are spiking, the dollar is wobbling, and traders are now expecting a spillover into the crypto market as well.

On April 2, Trump called for a blanket 10% tariff on all US imports. Although he softened his tone and stance later in the week, the message to markets was clear: global trade tensions are back on the table with China facing 125% tariffs. The announcement set off rapid selling in US Treasuries, pushing the benchmark 10-year yield up by a considerable 50 basis points within days.

Good luck explaining how #Trump panicked and suspended #tariffs for 90 days because the US bond market had been collapsing for 48 hours and was headed towards catastrophe.

Half the country still think tariffs are fees paid by one government to another. #TrumpTariffs #BondMarket pic.twitter.com/33KkfyXZoW

Related: Congress Puts Foot Down: Trump Signs Bill Overruling IRS on DeFi

Market Reactions: Kashkari Notes Investor Pullback, Fed Holds Steady

This is one of the sharpest moves in recent decades. Minneapolis Fed President Neel Kashkari commented on the fallout, noting that international investors are “pulling back from US assets.” This is a sign that America’s reputation as a safe haven may be faltering.

Interestingly, the Federal Reserve has chosen to stay on the sidelines, signaling no urgency to adjust rates despite the volatility.

Related: MAGA: Make Markets Awlible Again? Trump Delivers Historic Market Losses

A Double-Edged Sword for Crypto: Bull & Bear Cases Emerge

With the US Dollar weakening and bond-yield spiking, there are two scenarios that could present itself for the crypto market:

The Bullish Argument:

The Bearish View:

Bond-Yield Soars, Market Cap Analysis and Targets

The current total crypto market cap is hovering at approximately $2.64 trillion, slightly above the 0.618 Fibonacci retracement level ($2.64 trillion), a crucial resistance point. Holding this level is very important.

Also, a break above $2.75 trillion, which aligns with the 0.786 Fib level, could signal renewed momentum and open the path to $2.85 trillion and beyond, potentially confirming the bottom.

Meanwhile, the MACD indicator shows signs of a bullish crossover, with the histogram flipping green and momentum shifting favorably. A short-term rally could be brewing.

However, a failure to hold current levels, particularly a drop below the 0.5 Fib level (—$2.52 trillion), could see the market revisit lower support zones near the recent cycle low of $2.3 trillion.

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