Recent data from Barchart reveals a significant downturn in the correlation between Bitcoin (BTC) and the 10-year Treasury yield, marking one of the most negative readings in over a decade.

The correlation index plummeted to minus 53 earlier this week, indicating a notable divergence in the movements of Bitcoin and Treasury yields. For context, Treasury yields represent the returns investors can expect from U.S. government bonds.

Bond market analysts anticipate a stabilization in Treasury yields in the near future, with a slight downward trend expected by the year's end. The trajectory of the U.S. 10-year Treasury note yield has been turbulent this year, initially plummeting due to investor anticipation of multiple rate cuts by the U.S. Federal Reserve. However, it rebounded following robust economic data and persistent inflation concerns.

Uncertainty looms over the Fed's decision on rate cuts for the remainder of 2024, with speculation ranging from two cuts to none at all. This ambiguity has injected further unpredictability into financial markets, including the cryptocurrency space.

In recent market movements, Bitcoin witnessed a dip to the $66,000 level following the conclusion of a 19-day streak of inflows into Bitcoin exchange-traded funds (ETFs). Despite substantial inflows recorded the previous week, the cryptocurrency struggled to breach the $72,000 mark amidst stronger-than-expected job data.

With the upcoming release of the consumer price index (CPI) report and the Fed's interest rate decision, heightened volatility is expected in the Bitcoin market. Lower interest rates, if implemented by the Fed, could bode well for risk assets like Bitcoin, potentially driving renewed investor interest and market momentum.