MARKET ANALYSIS | U.S Treasury Yields Surge Pushing Bitcoin Down and Overshadowing CLARITY Act Legislation

Bitcoin fell back below the key $80,000 as surging U.S. Treasury yields and tightening liquidity conditions pushed investors away from risk assets, overshadowing optimism surrounding new U.S. crypto legislation.

The world’s largest cryptocurrency dropped more than 3% to around $79,000 after failing to maintain momentum above the resistance level, according to market data.

The retreat came as the benchmark 10-year U.S. Treasury yield climbed above 4.5% for the first time since mid-2025 while the 30-year yield approached 5.1%, increasing the attractiveness of government debt relative to non-yielding assets such as Bitcoin.

The selloff erased gains that followed the U.S. Senate Banking Committee’s approval of the CLARITY Act, a major crypto market structure bill viewed by investors as a positive regulatory development for the industry. Analysts said macro-economic pressures quickly overtook regulatory optimism.

“Higher yields are narrowing the compensation investors receive for holding assets such as Bitcoin,” said Nansen research analyst Nicolai Sondergaard.

The pressure was also visible in U.S. spot Bitcoin exchange-traded funds which were on track to record more than $700 million in weekly outflows – their largest weekly withdrawal since January 2026 – according to SoSoValue data.

Trading activity across major crypto exchanges also weakened sharply. Average spot net volumes on exchanges including Binance and Coinbase declined significantly as institutional traders reduced exposure to volatile assets amid tightening financial conditions.

Market analysts said rising Treasury yields are increasing the opportunity cost of holding Bitcoin especially as investors can now earn higher ‘risk-free’ returns through U.S. government debt and tokenized Treasury products.

Despite the short-term weakness, some analysts argued that Bitcoin remains highly sensitive to shifts in global liquidity conditions and Federal Reserve policy expectations, meaning any reversal in bond yields could quickly revive demand for crypto assets.

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