Geopolitical gridlock and yield pressure
The latest leg down was exacerbated by a massive $14.16 billion options expiry on Friday, which saw over $115 million in long positions liquidated in a single hour. However, the underlying bearish pressure is largely fueled by the war and sticky inflation.
Investors fled to the safety of the U.S. dollar as Iran threatened to expand its maritime operations in the Bab el-Mandeb Strait, complementing the effective closure of the Strait of Hormuz. Crude prices remain elevated, pushing the U.S. 10-year Treasury yield to its highest level since July 2025, creating a massive headwind for non-yielding assets like Bitcoin.
Market outlook and range-bound volatility
Despite the prevailing gloom, some institutional observers maintain that the current pullback reflects a reset in sentiment rather than a total breakdown in fundamentals. Bernstein analysts recently reiterated a bullish year-end target of $150,000