Bitcoin is trading around $77,900 to $78,000 on Tuesday, down roughly 1% from the Asian session high above $79,000, as a global bond market rout deepens and oil prices surge toward three-month highs.

Market Context

The cryptocurrency's modest decline comes amid a broader risk-off environment driven by escalating geopolitical tensions. President Trump announced additional U.S. military strikes against Iranian targets near the Strait of Hormuz on Tuesday, sending WTI crude oil above $90 per barrel for the first time since late June. Brent crude climbed 7% to $94.50 per barrel.

Global bond yields are climbing across developed markets as investors price in heightened Federal Reserve rate-hike expectations. The U.S. 10-year Treasury yield has risen to 4.78%, approaching its January 2025 high, while the U.K. 10-year gilt yield reached a new cycle high of 5.235%. Japan's 10-year government bond yield touched 3% for the first time since 1996.

Analysis

The combination of rising yields, oil prices, and dollar strength is weighing on risk assets broadly. Gold has fallen below $4,400 an ounce, while futures tied to the tech-heavy Nasdaq index are down nearly 1%. Bitcoin's decline has been relatively contained compared to equities, traders said.

"It's like watching the death of fiat in a slow-motion train crash," said notable bitcoiner James Lavish, commenting on a key global bond gauge yield rising to its highest level since 2008. "The higher the 10-year Treasury yield rises in anticipation of rate hikes, the less likely the Fed will hike," countered Peter Schiff. "Even if it does hike 25 basis points, it'll be too little to reduce inflation."

CME FedWatch data shows nearly a 70% probability of a Fed rate hike at the September 15-16 meeting, up from less than 40% just one week ago. Fed Governor Michael Barr indicated Tuesday that he could support raising rates if inflation does not moderate sufficiently toward the central bank's 2% target. The August CPI report, due September 11, is expected to be the deciding factor.

Bitcoin ETF flows resumed their upward trajectory on Monday with $217 million in net inflows, recovering from a one-day outflow of roughly $202 million on Friday that ended a nine-day buying streak. Ether ETFs extended their record run with an 11th consecutive day of net buying worth approximately $88 million, bringing the total inflow for that streak to $1.6 billion.

Bitfinex analysts noted that ether demand ran about four times as intense as bitcoin's over the past week when adjusted for market size. "We are in a market driven by spot buying," the trading desk wrote, pointing to $77,100 as the key support level holding.

Key Numbers

- Bitcoin price: approximately $77,900-$78,000 (down 1% from Asian session high above $79,000)

- WTI crude oil: $90+ per barrel, up 5% on Tuesday (first time above $90 in about three months)

- Brent crude oil: $94.50 per barrel, up 7%

- U.S. 10-year Treasury yield: 4.78%, approaching January 2025 high

- UK 10-year gilt yield: 5.235% (new cycle high)

- Japan 10-year JGB yield: 3% (first time since 1996)

- Bitcoin ETF inflows Monday: $217 million

- Ether ETF inflow streak: 11 consecutive days, totaling $1.6 billion

- Fed rate hike probability for September meeting: nearly 70%

What to Watch

Traders will focus on the August CPI report due September 11, which could determine whether the Fed proceeds with a rate hike at its September 15-16 meeting. The Nonfarm Payrolls report for August releases Friday and will provide additional labor market context.

Ether ETF flow data this week is being closely watched to gauge whether recent demand reflects genuine risk appetite rather than rotation from bitcoin products, Bitfinex analysts said. Bitcoin closed August with a 25% gain, its best month since November 2024, while ether gained 33% for the month.