Bitcoin Stays Below Its 200-Day Average as Treasury Yields Hit 12-Month Highs

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U.S. two-year and 10-year Treasury yields reached their highest levels since mid-2025 on Friday. This surge followed hotter-than-expected April inflation data, prompting traders to anticipate prolonged higher rates from the Federal Reserve. Bitcoin hovered around $81,000, remaining below its 200-day simple moving average just above $82,000.

Two-Year Yield Hits 4.05% as Markets Reprice the Fed

The yield on the two-year note, which is the maturity that changes the most when it comes to Fed policy expectations, hit 4.05% during Friday’s Asian session. This was the highest level since June 2025. More than 65 basis points have been added since March, and 13 basis points have been added this week alone. It was the highest yield on a 10-year note in 12 months, at 4.5%.

The move comes after this week’s April CPI and PPI reports. Consumer inflation reached 3.8%, the highest level since May 2023. Producer prices climbed at their fastest pace since 2022. Both measures are being affected by the rising cost of energy caused by the conflict in Iran.

With the Fed funds rate at 3.50% to 3.75%, the two-year yield now sits above the top of the policy range. Based on this, investors seem to be pricing in at least one more 25-basis-point rate hike instead of the cuts that were expected at the beginning of the year.

Rate Hike Probability Has Doubled in a Week

According to CME’s FedWatch tool, traders now assign more than a 44% probability to a rate hike by December, up from 22.5% a week ago. At the start of 2026, markets had priced in at least two cuts before year-end.

It’s one of the most noticeable changes in prices since the Federal Reserve started lowering rates in September 2024. The central bank has brought the benchmark rate down from around 5% to current levels over the past 18 months, but those reductions were measured and cautious. Now, the bond market is sending signals that the cycle of easing may be over and that tightening could start up again.

The Senate narrowly confirmed Kevin Warsh as the new Federal Reserve Chair on Wednesday. Warsh, President Trump’s preferred successor to Jerome Powell, is widely viewed as more open to faster and deeper rate cuts. Whether he shifts the Fed’s stance will be one of the most closely watched questions in the second half of the year. Trump has repeatedly called for rates as low as 1%.

Bitcoin Stuck Below 200-Day as Rising Yields Tighten Conditions

Bitcoin remained near $81,000 on Friday, largely unchanged for the day but still below its 200-day simple moving average, which is just above $82,000. A sustained break above that level could be interpreted as a possible return to a bullish long-term trend.

If Treasury yields go up, it costs more to hold Bitcoin and other assets that don’t earn interest. With two-year Treasuries going above 4%, capital has a better choice between a risk-free dollar return and an asset that goes up and down and doesn’t pay any interest. Gold, which is also being pushed down by the same factor, dropped 0.7% to $4,614.

The dynamic has been a persistent drag on Bitcoin since the yield move began accelerating in March. Each week of rising yields has tightened financial conditions without producing the kind of sharp sell-off that would reset positioning. Instead, Bitcoin has ground sideways below the 200-day average while yields climb.

Tokenized Treasuries Hit Record Highs as Yields Rise

One corner of the crypto market is benefiting directly from higher yields. The tokenized Treasury market has reached record highs above $15 billion in total assets, according to rwa.xyz data.

Rising yields strengthen demand for on-chain access to government debt that pays a higher coupon. J.P. Morgan and BlackRock both filed this week for new tokenized money market funds designed to meet GENIUS Act reserve requirements for stablecoin issuers, adding institutional-grade supply to a market that is growing alongside the very rate environment pressuring Bitcoin.