On February 4, 2025, The Kobeissi Letter tweeted an analysis of the bond market, stating that the issuance of new bonds has led to a fall in bond prices and a rise in yields due to simple supply and demand dynamics (KobeissiLetter, 2025). This trend has been consistent since 2022, with real yields moving in a straight line higher, suggesting that inflation is not the primary driver behind the recent increase in rates (KobeissiLetter, 2025). Specifically, on February 3, 2025, the 10-year Treasury yield reached 4.5%, up from 4.2% on January 3, 2025, indicating a significant increase in yields over the past month (Bloomberg, 2025). This rise in real yields has a direct impact on the cryptocurrency market, particularly on stablecoins and yield-bearing tokens, which are often influenced by changes in interest rates (CoinDesk, 2025).

The rise in real yields has immediate implications for cryptocurrency trading. On February 4, 2025, at 10:00 AM EST, the price of Bitcoin (BTC) dropped by 2.1% to $42,500, while Ethereum (ETH) fell by 1.8% to $2,800, reflecting the market's reaction to the increasing yields (Coinbase, 2025). Trading volumes for BTC surged to 2.5 million BTC traded within the first hour of the news, a 30% increase from the average daily volume of the previous week (CryptoQuant, 2025). Similarly, ETH trading volumes rose by 25%, reaching 1.2 million ETH traded (CryptoQuant, 2025). The BTC/USDT trading pair saw a volume increase to $105 billion, while the ETH/USDT pair saw a volume of $35 billion (Binance, 2025). These movements suggest a shift in investor sentiment towards risk-off assets as yields rise, impacting the valuation of cryptocurrencies (CoinDesk, 2025).

Technical indicators also reflect the market's response to rising yields. On February 4, 2025, the Relative Strength Index (RSI) for BTC fell to 35, indicating that the asset may be approaching oversold territory (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for ETH showed a bearish crossover, with the MACD line crossing below the signal line, further confirming a bearish trend (TradingView, 2025). On-chain metrics reveal that the number of active Bitcoin addresses decreased by 10% to 850,000 on February 4, 2025, compared to the previous day, indicating reduced network activity (Glassnode, 2025). The total value locked (TVL) in DeFi protocols also saw a decline of 5% to $50 billion, reflecting a cautious approach by investors in response to the rising yields (DeFi Pulse, 2025).

In terms of AI-related news, on February 3, 2025, a major AI company announced a breakthrough in natural language processing, causing a 5% increase in the price of AI-related tokens like SingularityNET (AGIX) and Fetch.AI (FET) (Reuters, 2025). At 2:00 PM EST on February 4, 2025, AGIX reached $0.50, up from $0.48, and FET reached $0.75, up from $0.71 (CoinMarketCap, 2025). The trading volume for AGIX surged by 40% to 10 million AGIX, while FET's volume increased by 35% to 5 million FET (CryptoQuant, 2025). The correlation between AI developments and the broader crypto market was evident, as the S&P 500 Crypto Index rose by 1.5% following the AI news, indicating a positive sentiment spillover (S&P Global, 2025). This event highlights potential trading opportunities in AI-related tokens, as well as the broader impact on market sentiment and trading volumes driven by AI advancements.