Bitcoin crash warning goes viral on X, post points to the "Berna Cycle"
Coinpedia
1h ago
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A post circulating on X claims that the Federal Reserve is in a policy dilemma: raising interest rates could push up borrowing costs and long-term U.S. Treasury yields, thereby dragging down growth, while maintaining or lowering interest rates could exacerbate inflation. The post also mentions long-term U.S. Treasury yields, the approximately $40 trillion in U.S. debt, and a "Japanese-style" policy dilemma, and suggests that tightening liquidity could lead to forced sales of assets, including Bitcoin.
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A warning about the plummeting price of Bitcoin is going viral on X, with the post focusing on Federal Reserve policies.

This analysis post claims that the Federal Reserve has actually fallen into a "policy trap." According to it, if interest rates continue to rise, borrowing costs and long-term U.S. Treasury yields may further increase, while also weakening economic growth and increasing debt servicing pressures.

The post also stated that if interest rates remain unchanged or are lowered, it could exacerbate inflation, relax financial conditions, and ultimately force the Federal Reserve to turn to tightening measures again.

This creates the cycle that the post emphasizes: higher interest rates may mean slower growth, while lower interest rates may lead to renewed inflationary pressures.

Long-term yield becomes the core of the warning

This post specifically mentions the long-term U.S. Treasury yield, stating that it has reached its highest level since 2007. The post also refers to the United States' debt of about $40 trillion and believes that rising debt costs may put greater pressure on financial markets.

A comparison with Japan is also an important part of this warning. The post suggests that the Federal Reserve may ultimately face similar policy dilemmas. However, none of these claims can prove that the market will crash on Monday.

Bitcoin added to the list of risky assets

The post claims that tighter liquidity may trigger forced selling of stocks, bonds, silver, and Bitcoin. The proposed chain of transmission is quite straightforward: higher yields lead to tighter liquidity, a decline in risky assets, and ultimately forced sales.

The post also argues that when liquidity disappears, investors may sell any assets that can be liquidated.

For Bitcoin, this means that the warning is directly related to a broader logic of liquidity, rather than any specific catalyst in the crypto market. The warnings of a Bitcoin crash are still just predictions circulating on X, and claims based on data do not constitute a confirmation that a collapse will definitely occur on Monday, October 5th.

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