Hawkish Fed Sends Yields Higher, Pressuring Bitcoin and Gold

The S&P 500 Index (SPX) has reversed from earlier gains and is now down roughly 0.1% as Treasury yields and the U.S. dollar move higher following a hawkish Federal Reserve message from Jackson Hole. The bigger issue is how far this repricing of interest rates goes, because gold and Bitcoin are already feeling much more pressure than the broader stock market.

Before the speech, the Federal Reserve Watch tool showed a 64.3% probability that rates would remain unchanged at the next meeting. After the speech, that flipped to almost a 60% probability of a rate hike. That is a major change in expectations, although the jobs report next week and other economic data still have to come in before the Federal Reserve makes its decision.

The U.S. 10 Year Treasury Yield (US10Y) is where I would keep most of my attention right now. It is pushing toward its 52-week highs, with 4.75% acting as the important resistance level. If the 10-year yield breaks above 4.75%, the next major level is 5%, which takes us back toward the 2023 high. If it breaks below the rising trend line instead, the downside could open toward 4.25%.

So the 10-year yield is essentially being squeezed between resistance and support, and whichever side breaks could have a meaningful impact across the market. Higher yields make financial conditions tighter and put more pressure on assets that benefited from easier money.

The U.S. Dollar Index (DXY) is also moving higher, but even with this rebound, it remains below resistance and within a broader bearish setup. The dollar can still move higher into that resistance, but the larger technical structure has not changed yet.

What is interesting is that stocks are holding up much better than several other assets. The S&P 500 is only down about 0.1% and remains above its midpoint technical level. As long as that level holds, the broader market structure remains bullish. Rising yields are creating pressure, but so far that pressure is showing up much more aggressively in gold and crypto.

Gold Futures (GC) are down almost 3% after rejecting a major resistance area. Gold traded back near $4,470 and reached a low of $4,465, putting the first important support around $4,425 within reach. That area could produce an aggressive bounce, but the stronger technical level sits lower around $4,165. That area includes previous pivot highs and the breakout zone from the prior move higher.

The VanEck Gold Miners ETF (GDX) is down almost 5%, showing even more weakness than gold itself. Newmont Corporation (NEM) had recently reached a new all-time high while gold remained roughly 20% below its own all-time high, creating a substantial gap between the strength of the miner and the underlying metal.

Silver Futures (SI) also pushed into the upper end of resistance during early trading and then rejected. So across precious metals, the message is fairly consistent: higher rate expectations and a stronger dollar are creating immediate pressure.

Technology is holding up better. NVIDIA Corporation (NVDA) reported strong earnings this week, and that gives investors an area where capital could potentially rotate instead of moving completely into cash. That helps explain why the broader stock market is not reacting nearly as violently as gold or crypto.

Bitcoin (BTC) is where the weakness becomes much clearer. Bitcoin traded as high as $81,500 before falling to $76,845, roughly a 3% decline. The rejection came from an area where two major technical resistance levels met, and price has now moved substantially lower.

The near-term downside target remains roughly $73,000 to $75,000. Bitcoin has already moved toward that zone, but there could still be more downside before the risk-reward of staying short becomes less attractive.

That does not mean $73,000 to $75,000 automatically becomes a long entry. The more patient setup is to wait for Bitcoin to pierce $70,000 before beginning to consider small long positions. That distinction matters because reaching a downside target and completing a larger correction are not necessarily the same thing.

Hyperliquid (HYPE) and Chainlink (LINK) short positions were closed during the decline, while some Bitcoin short exposure was also reduced. Earlier crypto exposure included Solana (SOL) and XRP (XRP), but Bitcoin remains the main asset to watch because it is giving us the clearest picture of how crypto is responding to the change in rate expectations.

Right now, I would keep the focus on the 10-year yield. A break above 4.75% puts 5% in play and could keep pressure on gold, Bitcoin, and eventually stocks. Gold is approaching $4,425 with $4,165 below it, while Bitcoin is moving toward $73,000 to $75,000 with $70,000 becoming the more important level for the long side. There is plenty of movement here, but there is no reason to chase it when the important levels are already clearly defined.