- Bitcoin is under pressure as investors flee to cash, with Bitcoin retesting $67,500 support amid a broad market retreat.
- Gold suffered its sharpest correction in over 50 years while US Treasury yields hit a nine-month high at 4.10%.
- The CME FedWatch Tool shows a 20.5% probability of a July rate hike as oil prices and war costs fuel inflationary fears.
Bitcoin dropped to test $67,500 support on Monday as fears over the Iran war and spiking oil prices drove investors to liquidate even traditional safe havens. Gold suffered its most severe single-day correction in over five decades during the same sell-off, data shows.
Consequently, US Treasury yields soared, with the 5-year note hitting 4.10% as traders demanded better returns. The S&P 500 simultaneously plunged to a six-month low, signaling a broad rush to liquidity and cash.
Monetary policy expectations tightened significantly as inflationary pressure from oil above $90 persisted. Bond market futures priced a 20.5% chance of a Federal Reserve rate hike by July, up from 0% just one week prior.
Meanwhile, US legislators debated an additional $200 billion in funding for the Iran war, according to The Washington Post.
Kevin Hassett of the US National Economic Council confirmed $12 billions had already been spent. Congressional unease with the strategy was growing, according to AP.
The soaring national debt, now past $39 trillion, further pressured consumers. Tech giants including Google, Meta, and IBM also faced steep losses exceeding 10% in recent weeks.
This broad risk aversion left Bitcoin vulnerable despite positive on-chain metrics. The aggressive dumping of gold and bonds therefore signaled deep investor caution, making a further Bitcoin drop to $66,000 a serious threat.
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