Bitcoin dropped in early Asian trading sessions as investors confronted a familiar nemesis: the growing likelihood that US interest rates aren’t coming down anytime soon. The world’s largest cryptocurrency traded near or below $65,000 as a cocktail of elevated Treasury yields, surging oil prices, and hawkish Federal Reserve signals sent risk appetite into retreat.
The macro squeeze tightening around Bitcoin
The numbers paint a clear picture of the pressure building on risk assets. Two-year Treasury yields climbed to 4.31%, their highest level since February 2025. The 10-year yield pushed even higher, reaching 4.66%.
Oil prices have added fuel to the fire, with crude surging to approximately $88.60 per barrel in recent weeks. Rising energy costs feed directly into inflation readings, which is precisely what the Federal Reserve watches when deciding whether to keep rates high, or push them higher still.
The Consumer Price Index and PCE inflation data have reinforced those concerns, with hawkish rhetoric from the Fed doing nothing to calm nerves. Market-implied odds for a rate hike ahead of the July FOMC meeting have been swinging between 14% and 37%, a range that reflects a market genuinely unsure whether the next move from the central bank will be a hold or an outright increase.
