Author: Marcel Pechman

Translated by: Deep Tide TechFlow

Deep Tide Introduction: On July 8, Bitcoin fell 3.5% intraday. The breakdown of the U.S.-Iran ceasefire agreement pushed Brent crude oil to $74, Japanese government bond yields reached a thirty-year high, and Strategy reduced its holding of 216 million USD in BTC beyond the core sell-off plan, compounding multiple bearish factors. Traders are preparing for a drop below $60,000.

On Wednesday, July 8, Bitcoin dropped 3.5%. New developments in the U.S.-Iran conflict pushed oil prices higher, and the Japanese bond market faced pressure again—these two factors combined triggered a collective risk-off operation across markets. Meanwhile, concerns intensified over Strategy's possible continued selling of Bitcoin, and traders are now preparing for the likelihood of dropping below $60,000.

Bitcoin's attempt to break through $64,500 on Monday failed, coinciding with the downward trend of the tech-heavy Nasdaq index. However, when the stock market partially regained lost ground on Wednesday, Bitcoin failed to rebound from the $62,000 level. This relative weakness indicates that there may be other factors uniquely suppressing the crypto market.

Brent crude oil surged from $68 the previous week to $74, driven by the formal collapse of the U.S.-Iran memorandum of understanding and rising risks of energy supply disruptions. After the U.S. launched strikes against Iranian targets citing attacks on ships, President Trump announced that the agreement was "over."

Rising energy costs directly translate into broader inflationary pressures, reducing the likelihood of recent interest rate cuts by the Federal Reserve and constraining the space for economic stimulus measures.

Traders are currently pricing a 69% probability of a rate hike in September, compared to only 42% a month ago. This environment poses heavy pressure on risk assets, while Bitcoin has not yet been widely recognized as an effective hedging instrument.

Global Economic Uncertainty Reemerges, Strategy's Selling Pressure Exacerbates

Market sentiment is made more cautious by Trump's call at the NATO summit to terminate trade with Spain, calling this key ally a "wasted cause," owing to Spain's failure to meet new defense spending targets. Such trade frictions could slow global economic activity and amplify concerns about economic contraction.

Japan's 10-year government bond yield. Source: TradingView

In Japan, government bond yields have soared to their highest level in thirty years, reflecting market concerns over a loss of central bank independence—the Japanese government is attempting to adjust the central bank's policy goal to "achieve a stronger economy." Japan is the largest overseas holder of U.S. Treasuries, further amplifying global contagion risks.

Strategy (MSTR US) announced on Monday the latest round of Bitcoin sales, totaling $216 million, which surprised the market. The nature of this sale is particularly delicate: it occurs outside of the company's core $1.25 billion "Monetization Program." According to the company's 8-K filing, funds raised by this program are only used to supplement cash reserves, and this sale is not included.

Investors are now concerned that Strategy will face ongoing selling pressure as it manages its capital structure and debt obligations, with annual dividends alone amounting to $1.76 billion. Strategy also holds over $3.8 billion in convertible bonds, with the earliest redemption date before April 2027.

On the regulatory front, documents show that the Indian central bank strongly supports a policy direction aimed at banning cryptocurrency activities, including prohibiting banks from having any exposure to virtual assets to maintain financial stability. The Indian tax authority has also emphasized the risks of tax evasion.

Global signals of regulatory tightening further add pressure to Bitcoin prices and market sentiment. Shorts continue to dominate the situation, with risk appetite shrinking due to geopolitical turmoil, the possible shift of the Fed to a more tightening monetary policy stance, and Strategy's ongoing cash flow demands.

Market sentiment is likely to remain weak in the short term, making a retest of the $60,000 support level increasingly unavoidable in the near future.