An anonymous analyst, known as Checkmate, who is closely followed in the cryptocurrency community, believes that Bitcoin (BTC) is on the verge of a significant price movement after a period of consolidation.
Checkmate shared his insight with his 91,900 followers on the social media platform X, stating that a crucial on-chain metric for Bitcoin indicates that it is almost time for BTC to break free from its consolidation phase.
The analyst explains that BTC’s sell-side risk ratio for short-term holders is rapidly decreasing, suggesting that sellers are running out of ammunition. Checkmate specifically focuses on the short-term holder cohort, which refers to entities that have held BTC for less than 155 days, as they are the primary drivers of near-term price action.
“Range contraction (consolidation) leads to Range Expansion (trending). Bitcoin is coiled like a spring, and it usually doesn’t sit still like this for long. The sell-side risk ratio for short-term holders is dropping rapidly, indicating that it is time to make a move.”
Source: Checkmate/X
Regarding what could trigger the next major Bitcoin movement, Checkmate is closely monitoring the US bond market. The analyst highlights that if the rate for 10-year yields (US10Y) approaches 5%, it could have negative implications for Bitcoin and the overall crypto market.
Checkmate explains that “higher yields mean tighter conditions, less valuable collateral, and a reduced overall risk tolerance.”
“I’ve marked in red the significant sell-off we witnessed in bonds between August and October 2023 on the chart below. During this period, US-10y yields approached 5.0%, equities declined by 10%, and Bitcoin experienced a 12% sell-off in a single day. However, BTC then consolidated for two months and surged by 30% thereafter.
When 10-year yields trade close to 5%, the Federal Reserve and Treasury have previously expressed concerns about the dysfunction in the treasury market and intervened to prevent further price declines. This is a valid argument for why Bitcoin initially sold off but then rebounded.
The bond market has the power to determine the fate of risk assets and financial stability. If yields continue to rise from here, we could be approaching a critical point where things could become volatile very quickly.”
Source: Checkmate/CheckonChain
In general, bond prices and yields have an inverse relationship. When yields rise, the prices of older bonds decrease as they have to compete with newer bonds offering higher interest rates.
At the time of writing, the US10Y yield stands at 4.394%, while BTC is trading at $68,643.
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