The US Treasury begins auctioning, but what impact does it have on the market?

This week, the US will auction 3-year, 10-year, and 30-year government bonds. In the current environment of high borrowing costs, selling bonds will likely reduce the amount of money in the market. If the auction is popular, it indicates strong demand and stable interest rates, which means the market will be fine and volatility won't be significant. However, if the sale goes poorly, with weak demand and soaring interest rates, the market may panic, worrying about potential issues with US debt. How serious could the consequences be? The bond market could experience a significant drop, the US stock market would also be affected, and risk assets like Bitcoin would suffer as well, leading to increased volatility in the dollar.

Fortunately, recent US Treasury auctions have been relatively good, at least the 10-year bonds sold quite well. However, there is a phenomenon to note: domestic buyers in the US are very enthusiastic, while overseas buyers show little interest. This means that US Treasury bonds will more likely draw funds away from US investors, potentially leading to a decrease in the money available in the wealthiest US investment markets.

Moreover, there are still 30-year US bonds to be sold, and with liquidity tightening and money becoming scarcer, the resulting short-term market pressure will be quite significant. In other words, this compresses the upward space for the cryptocurrency market.