Bitcoin’s Price Rebound Faces Headwinds as U.S. Treasury Market Sees Most Volatile Period in Four Months.

Bitcoin’s Recovery Faces Resistance Amid Surging Treasury Market Volatility

Rising volatility in the U.S. Treasury market is adding uncertainty to Bitcoin’s (BTC) potential rebound, despite encouraging inflation data.

February’s U.S. inflation report came in below expectations, strengthening the case for Federal Reserve rate cuts. This fueled optimism among analysts that BTC could break past $90,000, up from its current level of $82,000.

“With inflation cooling and recession fears not worsening, Bitcoin appears poised for its next breakout above the stubborn $90K resistance,” said Matt Mena, Crypto Research Strategist at 21Shares.

However, the pace of recovery may be slowed by heightened volatility in the Treasury market. The Merrill Lynch Option Volatility Estimate Index (MOVE), which tracks 30-day expected volatility in U.S. Treasuries, has surged to 115—its highest level since Nov. 6—after climbing 38% in three weeks, per TradingView data.

As U.S. Treasuries are a cornerstone of global financial markets, increased volatility can tighten liquidity, reduce leverage, and dampen investor risk appetite.

Following the Nov. 4 election, the MOVE index declined sharply, easing financial conditions and coinciding with Bitcoin’s surge from $70,000 to $108,000. However, BTC’s momentum faded as the MOVE index bottomed in December-January.

If Treasury market instability persists, Bitcoin’s path to a sustained recovery could face additional delays.