Global Markets React to Escalating Geopolitical Tensions
Last week, President Trump announced plans to raise tariffs on imported steel and aluminum from 25% to 50%, with intentions to broaden tariffs to cover critical minerals. The European Union promptly issued warnings of retaliatory measures. Meanwhile, Ukraine launched a substantial drone strike targeting Russian air bases, significantly escalating the conflict with Russia.
Amidst this intensified global geopolitical risk, demand for safe-haven assets surged, leading to a notable rise in gold prices. Despite OPEC+’s decision to increase oil production by 411,000 barrels per day starting in July, oil prices continued their upward trend, driven by supply concerns and regional instability.
Core Inflation Cools, Paving the Way for Potential Fed Dovishness
April PCE data showed a continued cooling in inflation, with the core PCE index decreasing to 2.5% year-over-year. This represents the lowest level since 2021,indicating that inflation is approaching the Federal Reserve’s long-term target. Meanwhile, real personal consumption growth slowed sharply from 0.7% in March to just 0.1% in April, highlighting weakening domestic demand and supporting the “soft landing” narrative. While Fed Governor Christopher Waller acknowledged the potential for tariffs to cause a temporary uptick in prices, he affirmed that a rate cut later this year remains a viable option. The market now broadly expects the first rate cut to occur in September.
Bond Market Sounds Alarm as Yields Approach Critical Levels
Despite recent dovish inflation data, U.S. Treasury yields have experienced a significant surge. The 30-year yield has risen to 5%, nearing its 2023 peak, while the 10-year yield has approached 4.6%. This upward movement is primarily driven by several factors: fiscal concerns surrounding a proposed tax cut package from Congress, and spillover pressure from overseas bond markets—especially a wave of selling in Japanese government bonds. This strong capital absorption by Treasuries is consequently exerting downward pressure on risk asset valuations, including Bitcoin and other high-beta digital assets.
BTC Stable, Altcoins at Risk
Bitcoin is currently navigating a complex environment characterized by an interplay of supportive policy developments and tightening liquidity conditions. On the positive side, accelerating regulatory progress—such as stablecoin frameworks, token legislation, and tax exemptions, along with institutional BTC purchases continue to offer strong long-term support. However, rising U.S. Treasury yields and the Treasury General Account (TGA) replenishment are draining liquidity, limiting BTC’s immediate upward trajectory and keeping its price range-bound.
On-chain data shows that approximately 89% of short-term holders are still in profit, nearing historical highs and signaling a risk of profit-taking pressure. Meanwhile, around 70% of long-term holders remain in profit, suggesting overall structural resilience. The MVRV Z-Score has risen to around +1.6, reflecting an optimistic but not yet overheated market sentiment. In the derivatives market, open interest in Bitcoin futures remains elevated above $23 billion, indicating heavy leverage exposure. Furthermore, positive funding rates across major exchanges and increasing skew in the options market point to a growing demand for downside protection.
Collectively, while Bitcoin remains within a medium-term bullish structure, the high concentration of short-term profits and elevated leverage suggest that near-term volatility could intensify. The market’s next directional move will likely depend on clearer macroeconomic signals. As for altcoins, their higher volatility and lack of structural support may leave them more vulnerable to broader market corrections compared to major crypto assets.
*The above content is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product.
About HTX DeepThink:
HTX DeepThink is a flagship market insights column created by HTX, dedicated to exploring global macro trends, key economic indicators, and major developments across the crypto industry. In a world where volatility is the norm, HTX DeepThink aims to help readers “ Find Order in Chaos.”
About HTX Research
HTX Research is the dedicated research arm of HTX Group, responsible for conducting in-depth analyses, producing comprehensive reports, and delivering expert evaluations across a broad spectrum of topics, including cryptocurrency, blockchain technology, and emerging market trends.
Connect with HTX Research Team: [email protected]
The post first appeared on HTX Square.
