Ah, Bitcoin (BTC) is back above $70,000, much to the relief of a few, recovering a dazzling 10% this week, all as global markets fumble their way back to some semblance of order after the dramatic geopolitical sell-off. While equities and crypto seem to have found themselves a cozy little floor to rest upon, the bond market, ever the pessimist, is far from convinced. The bond market’s signals say that the “risk-off” mood is still alive and kicking, with Treasury yields on the rise as investors scramble to recalibrate their inflation expectations.
As for the CME Fed funds futures, the probability of two 25-basis-point Fed rate cuts this year has dropped to a modest sub-50% probability, down from a near certainty of 80% before all the recent chaos. Ah, how quickly things change!
The culprit behind this curious divergence? Well, it’s none other than the energy sector. With oil prices spiking as supply chain threats in the Middle East make everyone nervous, bond traders have decided that inflation will be “higher for longer.” This little development has thrown the expectations for interest rates into a tizzy.
Cross-Asset Correlation Analysis: The 0.55 Signal
Now, let’s turn to the yield on the 10-year US Treasury note. It has risen for four days in a row, moving from 3.93% to 4.15%. How delightful! In the fixed-income world, rising yields usually mean falling prices and often signal a retreat to safer assets-or perhaps a fear of inflation that’s here to stay. How very cheery.
This, of course, spells bad news for those poor zero-yield assets like Bitcoin. When Treasury yields rise, the opportunity cost of holding volatile digital assets increases. So, while Bitcoin may have had a little party with equities and crypto this week, don’t get too comfortable. The bond market’s gloomy outlook tends to have a rather forceful pull on risk assets, particularly when oil prices remain on their upward trajectory.
Bitcoin’s recent behaviour suggests that the old narrative of crypto as a non-correlated asset-particularly in times of geopolitical tension-has become somewhat of a myth. Analysts have noted that the 30-day correlation between Bitcoin and the S&P 500 has risen to 0.55. This indicates that institutional investors are now treating Bitcoin more like a tech stock with extra risk than as “digital gold.” Oh, how times have changed!
The market has been behaving rather predictably, with the S&P 500 sliding to a multi-week low of 6,718 points on Tuesday, spurred by the escalating tensions in the Strait of Hormuz. What did Bitcoin do? Well, it dropped to around $65,000. And when the S&P 500 bounced back to 6,840, Bitcoin was quick to recover to $74,000. It seems that Bitcoin’s fate is now tied to traditional equity markets in ways we didn’t anticipate.
The Fed is trapped.
Oil pushing toward $82. Inflation rising. Stocks selling off. Growth slowing. Rate at 3.5-3.75%. No room to cut.
Next meeting March 17. They will do nothing.
And doing nothing is the worst possible outcome.
Stagflation isn’t a theory. It’s here.
– Michael A. Gayed, CFA (@leadlagreport) March 5, 2026
Bitcoin Recovery To $70k Preserves Bullish Structure
Bitcoin’s recovery to $70k has certainly preserved its bullish structure, but don’t go popping the champagne just yet. There are still significant hurdles ahead. Bitcoin is currently playing it safe within a symmetrical triangle pattern on the daily timeframe, a pattern that is often a precursor to big, messy volatility. How delightful.
The immediate support sits at $65,000, which was valiantly defended during the weekend sell-off. Should the price fall below this level, the recovery thesis would be firmly invalidated, and the next major demand zone would lie between $58,000 and $62,000, which, conveniently, aligns with the 200-day moving average. How poetic.
On the upside, resistance is firmly stacked at $74,000. If Bitcoin can reclaim this level, it might signal the resumption of an uptrend, but, and it’s a big but, technical indicators like RSI are hovering around 50. Traders should keep an eye on volume during any breakout attempt. A move above $74,000 without a corresponding volume spike would likely signal a classic bull trap. Oh, the drama!
Bitcoin history repeats?
– Crypto Rover (@cryptorover) March 6, 2026
EXPLORE: Bitcoin Stability Tested: ETF Institutional Shield Battles Geopolitical Volatility
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2026-03-06 14:21