There is clearly something brewing in the American economy. For example, US President Donald Trump’s sudden withdrawal of the 10% tariff on the European Union (EU) appears to be more than just a random move.
So, what tipped it? As AMBCrypto noted, rising US Treasury yields are starting to put pressure on the bond market, something the US government would prefer to avoid, especially as the mid-year elections approach.
That said, while this may sound bullish at first glance, it is backed by Bitcoin [BTC] With a recovery of 1.20%, a real breakthrough still seems far away. After all, the pressure is only just beginning, in what analysts call a “main war.”
The de-dollarization of Europe raises new concerns
The US Treasury market is facing an unprecedented shock.
For years, Asian and European countries have held U.S. government bonds to earn returns, essentially providing capital with which the U.S. could finance its debt. Actually only European investors delay nearly $2 trillion in value of these securities.
However, that trend is starting to change. Recently, foreign investors have started to cancel their government bonds. For example, Denmark’s exposure to US government bonds has fallen to $9 billion, the lowest level in fourteen years.
Source: Bloomberg
More generally, the the sell-off accelerates. According to analysts, Europe has dumped $150.2 billion in US government bonds. Meanwhile, China sold $105.8 billion, while India shed $56.2 billion, hitting multi-year highs.
Against this backdrop, President Trump’s withdrawal of tariffs appears more a response to these pressures, as the sell-off has pushed yields higher. 30-year yield a jump of almost 5%, followed by strength across the entire curve.
Why does this matter? The US debt burden is growing rapidly. About 26% of the $39 trillion federal debt is expected to be covered mature within the next twelve monthsand with interest rates rising, refinancing becomes much more expensive.
Remarkably, Analysts call this a ‘main war’ while foreign investors withdraw from financing U.S. debt. For risky assets, especially Bitcoin, it appears that investors are already considering the long-term risks of this conflict.
Bitcoin is showing signs of caution as investor confidence weakens
Macrovolatility continues to determine investor sentiment.
The recent tariff withdrawal and President Trump’s “non-hostile” attitude towards Greenland led to a risky move. send $50 billion went into the market, with about 60% flowing into Bitcoin, fueling the “BTC-led” momentum.
That being said, Bitcoin’s Coinbase Premium Index (CPI) remains at -0.1, indicating that US investors are still cautious. In fact, the index has been in the red since the October crash, indicating that confidence has not returned.
Source: CryptoQuant
Historically, Bitcoin’s bull runs have aligned with CPI gains, making it an important indicator. At the moment, it appears that a BTC bull run has not yet been priced in. The question, of course, is: what keeps American investors cautious?
That’s where the recent Treasury sell-off comes into play. As metals rally and foreign investors divest from U.S. debt, these “coordinated” moves show growing tensions in the economy.
For investors, this is a sign to stay on the sidelines while high-yield bonds look more attractive. As a result, capital flows into Bitcoin could be restricted, keeping momentum in check until broader confidence returns.
Bullish gold predictions will determine Bitcoin’s trajectory
We are less than a month into 2026 and investor preferences are clear.
With the US budget deficit under pressure and the ongoing sell-off in government bonds, metals like gold are reaching record highs (up 12% year to date) with a short-term target around $5,000/oz as investors seek protection from rising rates.
For Bitcoin, this rotation has already pushed the BTC/Gold ratio to a two-year low, dipping below 18 ounces of gold for the first time since late Q4 2023, highlighting how capital is shifting to safe haven assets.
Source: Long-term trends
That said, analysts see this as just the beginning.
For example, Goldman Sachs has “raised” its shares. gold forecast at the end of the year to $5,400 per ounce, citing growing demand. Example: Russia has been that way since the invasion of Ukraine won more than $216 billion in rising gold prices.
Meanwhile, India’s silver imports have increased to a record $5.9 billion in the past four months. In short, countries are stockpiling metals, a move that dovetails with their ongoing sell-off of U.S. Treasuries.
Technically, the Bitcoin/Gold ratio is at risk of a deeper collapse as macro pressures continue to weigh on sentiment and drive capital from risky assets to safe havens, limiting BTC’s breakout potential.
In this situation, it is crucial to keep a close eye on US Treasury yields.
Final thoughts
- Rising government bond yields and continued sell-offs by Europe, China and India are creating macro stress, pushing investors toward safe havens.
- This shift limits Bitcoin’s breakout potential, with the BTC/Gold ratio in jeopardy and government bond yields emerging as a key metric to watch.