Bitcoin breaks down as bond yields spike — short the leveraged crypto proxy
Thesis
Bitcoin ETFs just saw record outflows of $1.8B in a week as the Fed signals potential rate hikes, forcing BTC to cling to support. Meanwhile, US Treasury yields are actively rising, which historically crushes risky, non-yielding assets like crypto. Because Strategy (MSTR) acts as a leveraged proxy for Bitcoin and has already lost 41% this month, the combination of rising yields and Bitcoin weakness suggests another leg lower for the stock.
Strategy approach
Build a trend-following short strategy for MSTR on the daily timeframe. Entry: Enter short when the 10-day US Treasury yield (TNX) is trending up (making higher highs over 20 days) AND MSTR closes below its 20-day moving average. Exit: Cover the short if MSTR rallies 8% from the entry point, or if the TNX yield drops for 3 consecutive days.