An analysis says bitcoin (BTC) has repeatedly made steep gains during periods of rising U.S. 10-year Treasury yields.

Blockchain media outlet The Crypto Basic reported on Tuesday that market veteran Sykodelic argued that recent rises in long-term U.S. Treasury yields have more often coincided not with a top signal for bitcoin but with the start of an expansion phase.

Long-term Treasury yield increases are typically interpreted as meaning the U.S. government is raising funds by paying higher interest. In that case, inflation pressure can rise and risk appetite can weaken. Sykodelic said bitcoin has shown a different pattern. He pointed to a historical correlation between bitcoin's biggest moves and rising U.S. 10-year Treasury yields.

He cited three past episodes as key evidence. From January 2013 to January 2014, the U.S. 10-year Treasury yield rose to 3.04 percent from 1.75 percent, while bitcoin surged to $1,240 from $13.5 over the same period. Bitcoin later went through a major correction, but he said yields and prices moved together during the initial rising phase.

A similar pattern appeared from November 2016 to November 2018. The U.S. 10-year Treasury yield rose to 3.25 percent from 1.82 percent, while bitcoin jumped 2,740 percent to $19,800 from $697. From July 2020 to October 2023, the yield rose to 5.02 percent from 0.65 percent, while bitcoin climbed to around $35,194 from $9,135. During that period, it also recorded a peak of $69,000 in November 2021.

Sykodelic cited an expansion phase in the business cycle as the backdrop to this pattern. When production, gross domestic product (GDP) and employment increase, investor sentiment revives, and that environment can work in favor of risk assets such as bitcoin. He said the combination of rising U.S. debt yields and an expansion phase made a bitcoin rally possible.

He said the recent trend also resembles the past. Sykodelic said a new phase may have started in March. The U.S. 10-year Treasury yield rose to 4.65 percent from 3.93 percent, and bitcoin also rose more than 11 percent over the same period. He argued that if past cases repeat, this move could be the start of large-scale price volatility.

Still, the short-term market remains unstable. Bitcoin is currently trading around $77,300 and is down 4.7 percent over the past seven days. Last week, amid renewed inflation concerns and resurfacing geopolitical tensions, it failed to break above $82,000. It is being swayed by macro variables in the short term, but the moves of long-term holders stand out in terms of supply and demand.

Long-term holders accumulated bitcoin at a rapid pace during the period, and their market share also rose to levels not seen before. The market is watching whether the U.S. 10-year Treasury yield uptrend continues and whether long-term holder accumulation absorbs a short-term pullback and leads to further gains.