Bitcoin (BTC) has been among the best-performing assets amid the US–Iran war, but signs of upside exhaustion are emerging due to an “out-of-control” bond market.
Key takeaways:
US benchmark yields may rise by 200 basis points if the US–Iran war drags on further.
Past oil-linked conflicts boosted inflation and reduced risk appetite, hinting BTC price may decline below $50,000 in 2026.
Oil shock may send US yields soaring over 5%
Since Feb. 28, when the US and Israel attacked Iran, the benchmark 10-year Treasury yield has climbed to about 4.42%, its highest in nine months.
US 2-year, 10-year and 30-year bond yields monthly performance. Source: TradingView
The 30-year yield rose to roughly 4.97%, while the 2-year yield pushed up toward 3.95%–3.98%.
Treasury yields have climbed as the war-driven oil spike fuels fears of higher inflation, which, in turn, increases odds of zero rate cuts in 2026.
President Donald Trump’s five-day pause has eased immediate fears of strikes on Iran’s energy sites. But the war remains far from contained since Iran has denied any negotiations and cross-border attacks were ongoing as of Tuesday.
Source: X
That is prompting fears of further rises in US bond yields among market watchers, with technical chartists further anticipating the 10-year yield to reach 6.4%, a 200 basis point jump, if it breaks out from its symmetrical triangle pattern.
US 10-year note yield monthly chart. Source: TradingView
Higher yields reduce the opportunity cost of holding risk assets like stocks and Bitcoin. A US 10-year yield jump above 5% may trigger sell-offs in the BTC market if it continues to behave like a risk asset.
Oil shocks in the past
In the past, short oil-linked conflicts triggered sharp but brief moves in yields and stocks, while prolonged supply shocks pushed yields higher and kept pressure on equities.
During the 1973 Yom Kippur War and Arab oil embargo, yields rose modestly at first before climbing as inflation took hold, while the S&P 500 fell about 41%–48% during “stagflation.”
US 10-year note yield vs. S&P 500 index yearly chart. Source: TradingView
The 1979 Iranian Revolution saw a…
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