Bitcoin (BTC) could be on the verge of a significant price movement after months of consolidation, according to a well-known on-chain analyst. Checkmate, a pseudonymous analyst with a large following on social media platform X, suggests that a key on-chain metric indicates that BTC is ready to break out of its consolidation phase. He points to the rapidly declining sell-side risk ratio for short-term BTC holders, which suggests that sellers are running out of ammunition. Checkmate specifically focuses on the short-term holder cohort, or entities that have held BTC for less than 155 days, as they are the ones driving near-term price action. He likens Bitcoin to a coiled spring, stating that it typically doesn’t remain stagnant for long periods. Checkmate concludes that the decreasing sell-side risk ratio is a signal for action.


Checkmate also highlights the US bond market as a potential catalyst for the next major Bitcoin move. He explains that if the 10-year yields (US10Y) approach 5%, it could lead to unfavorable conditions for Bitcoin and the crypto market as a whole. The analyst asserts that higher yields indicate tighter conditions, less valuable collateral, and reduced risk tolerance. He points to a significant sell-off in bonds between August and October 2023, during which US-10Y yields reached close to 5%. This resulted in a 10% drop in equities and a 12% drop in Bitcoin in a single day. However, BTC then consolidated for two months before surging 30% higher. Checkmate suggests that if 10-year yields approach 5% again, it could lead to market dysfunction and prompt intervention from the Federal Reserve and Treasury to stabilize prices. This initial sell-off could be why Bitcoin experienced a decline followed by a rally. The analyst emphasizes that the bond market has the power to influence risk assets and financial stability.


It’s important to note that bond prices and yields have an inverse relationship. When yields rise, the prices of older bonds decrease as they have to compete with newer bonds offering higher interest rates. As of the time of writing, US10Y stands at 4.394%, while BTC is trading at $68,643.
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