By: James Stanley, Sr. Strategist
The Treasury buyback announcement sparked falling wedge breakouts in both Bitcoin and gold, but only Bitcoin has kept running, rallying through surging Treasury yields, a Federal Reserve rate hike and the failure of the CLARITY Act. That split matters because both are non-yielding assets that usually lose capital when rates and yields climb. Gold has followed that script more closely, with each bounce sold a little earlier than the last. Bitcoin, by comparison, has turned a run of bearish headlines into fresh multi-month highs, and that raises a bigger question about what the price action may be discounting.
James Stanley, StoneX Media Senior Market Analyst, has tracked markets for more than two decades, starting with equities in 1999 before expanding into options, fixed income and FX, and he analyzes price action alongside macroeconomics on medium-term time frames of two days to two weeks. That event-driven focus on price action and macroeconomics applies directly to how a single policy catalyst, the Treasury buyback, has played out across the Bitcoin and gold charts.
"What ultimately popped this out of the wedge was the Treasury buyback announcement from Scott Bessent," Stanley said of the Bitcoin chart, which had been coiling inside a falling wedge since its January swing high. The Treasury buyback announcement pushed Bitcoin out of a falling wedge formation in which sellers repeatedly failed to force a fresh low, a pattern that had already begun shifting into an inverse head and shoulders as bulls started to overpower them. Gold had built a similar falling wedge from its March swing high, and its breakout arrived around two weeks earlier, a week after a Federal Reserve decision that was not as hawkish as markets had feared. The buyback announcement then gave gold a second push, yet its effect on Bitcoin was far larger. For traders, that makes the Treasury buyback a useful dividing line, since both markets were handed the same catalyst and only one has kept building on it.
Gold's post-buyback rally topped out about a week later, while Bitcoin has continued to climb. Since then, gold has carved out a descending triangle, a pattern characterized by lower highs pressing down on horizontal support. The pattern matters because, as Stanley points out, "you're seeing each of these bounces get faded a little bit earlier," a sign of sellers moving in ahead of each rally. That leaves bears with an open door to test deeper support in gold over the short term. Notably, the strong build of long-term support beneath gold means a short-term bearish pattern is not the same as a confirmed breakdown, and a break of that deeper floor would likely need a much larger shock to materialize.
Bitcoin has rallied through a backdrop that normally pulls capital out of non-yielding assets, including surging Treasury yields, a Federal Reserve rate hike with another one flagged, and the failure of the CLARITY Act. The Treasury market alone offered plenty of reasons for caution, with two-year yields climbing sharply and 30-year yields reaching a fresh 19-year high. So why has Bitcoin held up? Buyers defended support on consecutive days around the Federal Open Market Committee decision, and the rally that followed produced a weekly bullish engulfing candle, a pattern that takes out both the prior low and the prior high. According to Stanley, "if a market is rallying on seemingly bad news, then there's something amiss."
--- Written by Gus Farrow, Senior Manager, StoneX Media
--- Expert: James Stanley, StoneX Media Senior Market Analyst
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