Glassnode says rising U.S. Treasury yields are choking crypto market liquidity

Rising U.S. Treasury yields are blocking liquidity from flowing into the crypto market, according to a CoinNess analysis of Glassnode’s weekly report. Glassnode said the U.S. two-year Treasury yield rose ahead of the FOMC rate decision, moving above returns from crypto carry trades, a basis-trade strategy that seeks to capture the gap between spot and futures prices by buying spot and selling futures. Spot trading volume then fell sharply, while exchange liquidity inflows dropped to their lowest level. Glassnode added BTC is facing strong upside resistance at $69,000, the breakeven level for short-term holders, and spot ETF inflows have also paused. Glassnode added the current downturn is the shallowest bear market on record, but more time is needed before the bear market fully ends. Without an improvement in liquidity conditions, a full-fledged rebound will be difficult.