While Bitcoin attracted attention with a sharp decline in the first weeks of the year, a delayed pressure began to form in traditional markets. The BTC price, which was around $90,000 at the beginning of the year, dropped to $60,000 in a short time. During the same period, US stock markets remained strong and major indices traded near historic highs.
Increase in Bond Rates Pressures Shares
The picture has begun to change in recent weeks. While inflation concerns gained strength again after the Iran war that started on February 28, expectations for interest rate cuts by the US Federal Reserve weakened. These developments brought about a rapid rise in US bond yields.
The 10-year US bond interest rate reached 4.41 percent, reaching the highest point since August 1. In the same period, the two-year bond interest rate increased to 3.94 percent. Since the beginning of the war, long-term yields have increased by 48 basis points and in the short term by 57 basis points.
Bond yields are considered the main reference for borrowing costs in the economy. When these rates rise, credit costs increase and financing conditions become difficult for companies and consumers. This situation reduces risk appetite and puts downward pressure on stocks.
Tech-heavy Nasdaq futures fell to 23,890 points, the lowest level since September. S&P 500 futures similarly tested recent months’ lows, falling to 6,505 points.
Bitcoin Stands Out as a Leading Indicator
The time lag between the early decline in Bitcoin and the recent weakness in stocks has strengthened views that the crypto asset could be a leading signal for risky markets. Traditional market participants closely monitor BTC price movements to understand the overall risk perception, especially on weekends and when exchanges are closed.
It is considered that similar structures occurring on price charts increase the possibility of a broader withdrawal in stocks. Bloomberg Senior Commodity Strategist Mike McGlone emphasized that Bitcoin is at the forefront among risky assets.
It was stated that Bitcoin’s sharp decline could be the early stage of a broader market downturn and volatility in the commodity market could spread to stocks.
After the sharp decline at the beginning of the year, the Bitcoin price has been moving in a narrower band in recent weeks. While BTC has stabilized in the range of $65,000 to $75,000, it is at around $67,790 in recent transactions.
In the options market, it seems that risk perception remains high. Demand for put options, which provide protection against declines, has reached record levels. This shows that investors remain cautious against downside risks.
