Rising Treasury Yields Spark Bitcoin and Stock Market Concerns

TLDR

• Bitcoin plummeted from around $90,000 to nearly $60,000 in early 2026, while stocks remained stable — until recently.
• Since the Iran war started on Feb. 28, Treasury yields have surged, pulling Nasdaq and S&P 500 futures down to September lows.
• The 10-year Treasury yield reached 4.41%, its highest level since Aug. 1, rising 48 basis points since the conflict began.
• Both Bitcoin and stock market fear indexes entered “extreme fear” territory in the last week of March.
• 52% of retail investors are now bearish on the next six months — the highest figure since May 2025.

(SeaPRwire) –   Bitcoin fell sharply at the beginning of 2026, dropping from about $90,000 to nearly $60,000 in just five weeks. Back then, U.S. stock markets hardly budged, trading close to record highs.

That gap is now narrowing — but not in a positive manner.

Since the Iran war began on Feb. 28, inflation fears and diminishing expectations for Federal Reserve rate cuts have driven U.S. Treasury yields higher. This has started to push equities down, matching the weakness Bitcoin exhibited weeks earlier.

The 10-year U.S. Treasury note yield increased to 4.41% early Monday, the highest since Aug. 1. It has risen 48 basis points since the Iran conflict began. The two-year Treasury yield has surged 57 basis points to 3.94%.

Higher yields are important because they increase borrowing costs throughout the economy — from mortgages to corporate loans. This typically lowers risk appetite in stock markets.

Nasdaq futures fell to 23,890 points early Monday, the lowest since Sept. 11. S&P 500 e-mini futures dropped to 6,505 points, also the lowest since September.

Bitcoin as a Leading Indicator

Analysts have long viewed Bitcoin as an early indicator of broader market risk appetite. Its early 2026 drop may have been a preview of what stocks are now going through.

Bloomberg Senior Commodity Strategist Mike McGlone mentioned in a recent report that Bitcoin is “at the top of the risk-assets iceberg,” and said its declining price could be the early phase of a broader market pullback — especially if commodity volatility spreads to equities.

Bitcoin itself has been relatively stable in recent weeks, trading between $65,000 and $75,000. As of Monday morning, it was around $68,790. However, options market data reflects significant concern, with a record preference for put options — contracts used to hedge against further price declines.

Fear Spreading Across Both Markets

Sentiment data indicates fear is now widespread. The Crypto Fear & Greed Index has gone back to “extreme fear.” A similar index for stocks has also fallen sharply.

On-chain data platform Alphractal calls the convergence of fear in both markets a rare signal, advising investors to remain cautious.

A survey from the American Association of Individual Investors finds 52% of retail investors have a bearish outlook for the next six months. This is the highest reading since May 2025.

Donald Trump’s 48-hour ultimatum about the Strait of Hormuz is still ongoing, increasing market tension.

Observation

Historically, when Bitcoin’s correlation with the S&P 500 drops to -0.5 on the Correlation Coefficient, and then turns sharply up, it is a warning sign that the stock market is going to collapse and take BTC with it

Usually there’s a bounce first to add to the pain pic.twitter.com/Tefbzo2nd3

— Tony Severino, CMT (@TonySeverinoCMT) March 21, 2026

Analyst Tony Severino highlights a historical pattern where Bitcoin’s correlation with the S&P 500 drops to -0.5 and then sharply reverses upward — a pattern he says often comes before a stock market crash. That correlation has now become positive again.

“Usually there’s a bounce first to add to the pain,” Severino said.

Markets are now factoring in a small chance that the Federal Reserve might raise interest rates instead of cutting them.