Bitcoin poised for breakout as bond market conditions favor digital assets, says Standard Chartered
2025-02-07
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Standard Chartered sees current market conditions as supportive for bitcoin and the wider digital asset sector, as long as yields stay contained and the economy remains stable.
The bank's global head of digital assets research, Geoff Kendrick, said in a note on Friday that the yields on 10-year Treasury notes have held below 4.50%, suggesting that the bond market is not pricing in aggressive Fed tightening. That, in turn, supports risk assets like bitcoin.
"The so far inability of 10-year U.S. treasury yields to break back above 4.50% despite the strong detail in today's U.S. payrolls release is very constructive for digital assets," Kendrick said. "Yields not higher, but the economy still in good shape, is a Goldilocks zone for digital assets."
21Shares Crypto Research Strategist Matt Mena shared a similar view and noted that falling bond yields and a weaker dollar would create a favorable backdrop for risk assets, particularly bitcoin, which thrives in environments of easier monetary conditions.
Bitcoin targets $102,500, eyes fresh all-time high
Kendrick added that if 10-year Treasury yields hold below 4.50% through the weekend, bitcoin could break up to $102,500, a key resistance level in recent trading sessions.
"Then, if we get no new negative catalysts—such as unexpected regulatory actions or macroeconomic shocks—we could see conditions improve for digital assets, opening the door for a fresh all-time high above $108,000 in February,” Kendrick said.
The U.S. jobs report for January was somewhat disappointing but not alarming. Data from the Bureau of Labor Statistics showed that the U.S. labor market added 143,000 jobs last month, falling short of the 170,000 forecasted by economists and significantly lower than December’s 307,000. However, the unemployment rate unexpectedly declined to 4% from 4.1%, while wage growth accelerated to 4.1% from 3.9%, signaling continued resilience in the labor market. The labor force participation rate also edged up to 62.6%.
21Shares' Matt Mena cited optimistic indicators in today's data.
“With hiring slowing but the job market remaining stable, the Federal Reserve has less urgency to keep rates high," Mena said. "This sets the stage for bitcoin to benefit as investors position for a potential rate cut later this year."
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