Bitcoin pressured by rising yields as equities draw strength from earnings expectations

• Bitcoin lost fresh capital support as rising Treasury yields sparked $679 million in BTC ETF outflows.
• Strong Q3 earnings expectations eased the impact of rising yields on US equities.
• Wintermute warned that Bitcoin could face further downside if the 30-year Treasury yield breaks above 5.64%.

Bitcoin (BTC) is seeing a TradFi capital exodus as rising US Treasury yields weigh on digital assets, while equities draw strength from expectations of strong corporate earnings, according to Wintermute.

Crypto market diverges from equities amid hawkish Fed outlook

The loss came as Bitcoin (BTC) fell 3.2% last week, while Ethereum (ETH) declined 7.0% and altcoins dropped 2.9%.

“Crypto lost its flow support while equities kept their earnings support, so we stay constructive only if yields ease and flows return,” Wintermute wrote in a Tuesday report.

Wintermute identified the Federal Reserve's latest meeting minutes as a key factor behind the divergence between cryptocurrencies and equities.

The minutes, released Wednesday, indicated that most Fed officials expected another interest rate increase before year-end. Wintermute noted that the document contained no discussion of rate cuts, highlighting a shift in market expectations toward further monetary tightening.