Bitcoin fell below $66,000 due to rising treasury yields attracting investors’ attention. Prediction markets and CME’s Fed Monitoring Tool have determined that rate cuts are unlikely to occur until the end of this year. Bitcoin continued to fluctuate around $66,000 on the CoinDesk20 Index, indicating overall market weakness. Crypto futures rates and open interest declined, signaling the potential end of the two-month rally.

Bitcoin (BTC) extended losses during Asian trading hours on Tuesday, trading around $66,000. Traders weighed rising Treasury yields and the possibility that the Fed could delay interest rate cuts until later this year. While Ether (ETH) was trading above $ 3,300, the CoinDesk 20 (CD20) Index decreased by 0.6% to 2,532.

The yield on the 10-year Treasury note rose 4.40% overnight to a two-week high, driven by persistent inflation and unexpectedly strong manufacturing activity. This increase often encourages an outflow of money from risky assets and zero-return investments. But this time, gold remained resilient despite a weak tone in Bitcoin and Wall Street’s tech-heavy index Nasdaq.

“Bitcoin’s pullback to around $65,000 is generally attributed to interest rates and rising treasury yields,” Semir Gabeljic, director of capital formation at Pythagoras Investments, said in an email interview. “High interest rate environments generally tend to reduce investor risk appetite.” At Polymarket, punters have completely ruled out a rate cut by May and are split 50-50 on whether it will happen in June. Most of the sure money is on the off chance that it happens in the fall.

According to the CME Fed Monitoring tool, there is a 97% chance that rates will remain the same after the May meeting. Coinglass data shows that over $245 million in long positions were liquidated in the last 24 hours, $60 million of which were BTC positions. “Perpetual futures funding rates for crypto assets have mostly returned to 1 basis point, and global futures open interest decreased by 10% overnight, indicating some leveraged long positions have been closed,” said Jun-Young Heo, Derivatives Trader at Singapore-based Presto. “As recent bitcoin ETF inflows slowed and BTC and ETH market prices fell below the 20-day moving average, some trend followers may have viewed yesterday as the end of a two-month rally,” he continued.