Bitcoin continued its decline on March 28, 2024, trading around $66,200 as the market reacted to growing doubts about de-escalation between the US and Iran. President Donald Trump's 10-day pause on energy airstrikes did not reassure investors, especially after reports indicated Israel continued its attacks during that period.
This is clearly reflected in the financial markets.
The S&P 500 index has been steadily declining throughout the past week, reaching its lowest level in six months.
This widespread sell-off reflects a sharp increase in risk aversion, as investors withdraw from the stock market due to growing concerns about geopolitical situations and macroeconomic instability.
The crypto market is experiencing a similar trend.
The S&P 500 ended March at its lowest level in six months. Source: Google FinanceBitcoin's price movements show a clear weakening trend, with intraday rallies quickly failing. This reflects a deeper problem.
The market did not XEM Trump's pause as a step toward peace, but rather as a delay in escalating the conflict. Reports of continuing attacks further reinforced this view.
At the same time, rising Treasury bond yields are making financial conditions tighter. High yields reduce liquidation and make the cost of Capital expensive, thereby putting pressure on risky assets such as stocks and cryptocurrencies.
Therefore, Bitcoin is currently trading more like a technology stock than a hedge asset.
Bitcoin price continues to fall sharply. Source: CoinGeckoIn previous cycles, geopolitical tensions sometimes supported Bitcoin prices. However, this is no longer the case. The market is now dominated by concerns about inflation, high oil prices, and fading expectations of interest rate cuts.
At this point, the message is quite clear.
Until there are credible developments regarding de-escalation and bond yields remain unstable, the crypto market as a whole will remain under pressure, and downside risks will continue in the short term.
