Bitcoin price pulled back this week, falling from its all-time high of $108,200 to below $95,000 as concerns over the bond market persisted.

Bitcoin (BTC) dropped sharply on Tuesday as U.S. bond yields surged to their highest levels in over two years following stronger-than-expected job vacancy data.

The bond market sell-off continued on Wednesday, pushing 30-year and 10-year yields to 4.95% and 4.70%, respectively. Rising yields suggest the market expects the Federal Reserve to maintain its hawkish stance throughout the year.

The release of Wednesday’s Federal Reserve minutes and Friday’s nonfarm payroll numbers is expected to impact the bond market further. These minutes may offer more insight into the Fed’s recent meeting and provide hints about future monetary policy. Petr Kozyakov, CEO of Mercuryo, commented in a note sent to crypto.news on Jan. 8:

“Markets are no longer euphoric over bitcoin entering a new age where even the US Central Bank will hold a Strategic Bitcoin Reserve. Instead, Bitcoin’s role as an ultra risk-on, risk off asset has surfaced once again amid signs that the US Federal Reserve may keep interest rates elevated for longer than previously expected.”

Some analysts believe bond yields could continue climbing as inflationary pressures persist due to policies under Donald Trump’s administration, including deportations, tariffs, and tax cuts. In a recent note, Mark Zandi, the Chief Economist at Moody’s warned that higher yields may affect the stock and crypto market. 

Legendary trader Peter Brandt remains optimistic about Bitcoin’s longer-term outlook despite acknowledging the potential for near-term volatility due to bond market concerns. Brandt also noted that Bitcoin appears to be forming a head-and-shoulders pattern, which could signal further fluctuations.

Weekly chart points to more Bitcoin price gains

The weekly chart points to potential upside for Bitcoin in the coming weeks. The chart shows a cup-and-handle pattern, a classic bullish continuation formation. Bitcoin broke out of the handle section in November, reaching a record high of $108,200 in December.

Currently, Bitcoin is forming a bullish pennant pattern just below the key resistance level of $100,000. Such consolidations near major psychological levels are common before major upward moves. The pennant consists of a long vertical line followed by a triangle pattern, indicating the potential for a breakout.

Bitcoin also remains above the 50-day moving average. Therefore, the coin will likely have a strong bullish breakout in the next few weeks. 

A strong breakout could occur in the coming weeks, possibly ahead of Donald Trump’s inauguration on January 20. If this breakout materializes, the key target level to watch will be $122,000. This estimate is based on measuring the depth of the cup and projecting it upward from the breakout point.