Bitcoin drops below $67,000 as oil shock and bond market stress collide

Bitcoin fell below $67,000 on Friday, hitting its lowest point in weeks as a perfect storm of rising oil prices, bond market stress and the largest options expiry of the year pushed prices lower.

At the time of writing, Bitcoin was trading around $66,200, down roughly $2,860 from the previous day.

The drop came as Iran tightened its grip on the Strait of Hormuz, turning back ships and effectively closing the waterway to countries it considers enemies. With about 20% of the world’s oil supply flowing through that narrow passage, energy markets reacted fast.

Ukraine’s strikes on Russian oil infrastructure added yet another layer of pressure, disrupting a workaround that had helped offset supply shocks from the Iran war. The result is an oil market that keeps pushing prices higher and an inflation picture that keeps getting worse.

That brings us to the bond market. U.S. 10-year Treasury yields have surged to around 4.42%, up roughly 46 basis points since late February.

Analysts at The Kobeissi Letter warned that the pace of the rise matches what markets saw during Liberation Day in April 2025, but this time the situation is far more complex. In less than one month, the conversation has shifted from rate cuts to rate hikes, with the base case now showing a Fed pause for the next 18 months.

“Inflation expectations have become so bad that the market is trading like an emergency Fed rate hike is imminent,” Kobeissi founder Adam Kobeissi said.

Adding to the pressure, roughly $14 billion in Bitcoin options expired on Friday. Derivatives traders say that institutional investors spent much of Q1 selling upside bets to generate income in a quiet market. That activity pushed risk onto market makers, who were buying dips and selling rallies to stay balanced.

The effect was a dampening of volatility that kept Bitcoin stuck in a range. Now that those contracts are gone, the mechanical buying and selling tied to hedging will fade, leaving Bitcoin more exposed to external shocks.

Ryan Lee, Chief Analyst at Bitget Research, laid out two scenarios for Q2 2026. If tensions around Iran persist and keep Brent crude above $120, macro conditions will stay tight across global markets. Under that scenario, Bitcoin could move toward $55,000, Ethereum may test $1,500, and XRP could approach $1.00 as tighter liquidity weighs on digital assets.

On the flip side, a faster diplomatic resolution could change things quickly. If oil stabilizes lower, Bitcoin could move above $90,000, Ethereum toward $2,700 to $2,800, and XRP beyond $1.80. Lee noted that institutional ETF accumulation continues to provide underlying support through the volatility.

For now, Bitcoin is on track to close March with its sixth straight monthly loss, something that has not happened since the end of the 2018 bear market.

Traders are watching the $65,000 to $75,000 range closely, with macro pressures now firmly in the driver’s seat.

Some investors are still accumulating during dips, with exchange outflows suggesting coins are moving into storage rather than being positioned for sale. But with geopolitics, oil and bonds all pulling in the same direction, the path of least resistance remains lower until something breaks the cycle.