ING Bank Netherlands: The 10-year US Treasury yield may rise above the critical range, which will continue to put pressure on the crypto market.

ING Bank of the Netherlands’ latest analysis points out that the yield on the 10-year US Treasury bond is currently holding above 4% and has room for further upside. This trend is not favorable for high-risk assets such as cryptocurrencies, as rising yields often signal a tightening financial environment and declining risk appetite.

At present, the 10-year US Treasury yield stands at 4.09%. Despite several weak economic indicators, including the ADP employment report, and US employment numbers shrinking for the third time in five months in November, yields have shown significant resilience. In a Thursday client report, ING stated that US Treasury yields have recently fluctuated mainly in the 4% to 4.1% range, and “while a short-term dip below this range is possible, a breakout above the upper end is more likely to lead to continued gains.”

After the ADP employment report was released, the 10-year yield briefly fell to 4.06%, but quickly rebounded. Typically, weak employment and inflation data would strengthen expectations of a rate cut, thereby pushing yields lower. However, the probability of a Fed rate cut this month has risen to 87%, yet yields remain high, indicating that the market has made a new assessment of changes in the economic structure.

ING attributes this “resilience” to the US economy undergoing a stage of productivity growth driven by technologies such as artificial intelligence. Analysts pointed out that while declining net immigration and weaker labor demand do affect the data, the key driver of future economic growth has shifted from the quantity of employment to productivity gains.

Over the past three months, the 10-year Treasury yield has oscillated within a 4% to 4.20% range. CoinDesk has previously highlighted the importance of this structural range. If yields break through the 4.1% resistance, it could have a profound impact on market expectations for 2026 and beyond.

The PCE inflation data to be released this Friday could also be a key factor driving yield volatility. ING believes that if the results are weak, it would not be surprising for yields to briefly dip below 4%, but the downside is expected to be limited; conversely, if yields break to the upside, it could trigger a broader repricing across the US Treasury and risk asset markets.

For the crypto market, persistently high or rising US Treasury yields mean a tight liquidity environment, which may continue to limit the rebound potential for Bitcoin and other digital asset prices. (CoinDesk)