Bitcoin (BTC) has been one of the top-performing assets since the US–Iran war began, but signs of upside exhaustion are appearing as the bond market behaves “out of control.”
Key takeaways:
– US benchmark yields could rise by about 200 basis points if the US–Iran war continues.
– Historical oil-linked conflicts raised inflation and reduced risk appetite, suggesting Bitcoin could fall below $50,000 in 2026 if the shock persists.
Oil shock may send US yields soaring over 5%
Since Feb. 28, when US and Israeli strikes targeted Iran, the 10-year Treasury yield has climbed to roughly 4.42%, its highest in nine months. The 30-year yield reached about 4.97%, while the 2-year moved toward 3.95%–3.98%.
Yields have risen as the war-driven oil spike fuels inflation fears, increasing the odds that rate cuts won’t come in 2026. A brief pause on strikes eased immediate concerns, but the conflict remains unresolved and cross-border attacks continued, keeping markets on edge.
Some technical analysts warn that if the 10-year yield breaks certain chart patterns it could surge another 200 basis points to near 6.4%. Higher yields raise the opportunity cost of holding risk assets. If the 10-year climbs above 5%, Bitcoin—behaving like a risk asset—could face significant sell pressure.
Oil shocks in the past
Short oil-related conflicts historically caused sharp but brief moves in yields and equities, while prolonged supply shocks created sustained pressure. During the 1973 Yom Kippur War and Arab oil embargo, yields rose as inflation took hold and the S&P 500 plunged in the stagflation period. The 1979 Iranian Revolution saw 10-year yields rise about 150–200 basis points over a year. In the 1990–91 Gulf War, yields rose 50–70 basis points and the S&P 500 dropped roughly 16%–20% before recovering. The 2022 Russia–Ukraine war also coincided with higher yields and an initial S&P 500 decline.
The current US–Israel–Iran conflict fits an early stage of that pattern. If it drags on and oil remains elevated, yields could climb further and pressure risk assets, including Bitcoin. Because BTC has been closely correlated with the S&P 500, extended macro stress would likely mean deeper downside unless the war de-escalates quickly.
How low can the Bitcoin price go?
Technically, Bitcoin could fall to $50,000 or lower in the coming months if it breaks down from its prevailing bear-flag pattern. Prediction markets align with this outlook: traders currently price about a 70% probability that Bitcoin drops below $55,000 in 2026 and a roughly 46% chance it falls below $45,000.
BitMEX co-founder Arthur Hayes says an extended US–Iran war might force the Federal Reserve to loosen policy, which would be bullish for Bitcoin. “The longer this conflict goes on, the higher the likelihood that the Fed has to print money to support the American war machine,” he said. “That’s when I’m going to buy Bitcoin when the central banks start printing money.”
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