Amid negotiations to establish a lasting peace settlement and clear the strait, the exchange fueled fears of prolonged energy disruptions. Futures for Brent crude oil, the global benchmark, rose to a 12-day high of $96 per barrel as bond yields ticked higher.
The U.S. 10-year Treasury yield’s rise to 4.5% indicates investors are growing concerned about higher energy costs driving inflation near-term as the conflict continues to drag on, Carlos Guzman, vice president of research at crypto trading firm GSR, told Decrypt.
Guzman said Tuesday's fighting appears to have sapped enthusiasm toward AI on Wall Street, with the tech-heavy Nasdaq on track to fall nearly 1% from its all-time high close on Tuesday. The S&P 500 had also slid 0.8%, while the Dow Jones erased more than 430 points.
“There was some optimism that you’d see a resolution,” Guzman said, noting that traders are pricing in higher odds of an interest rate hike than a cut from the Federal Reserve, which typically triggers a shift away from speculative assets like stocks and crypto.
In a note shared on Tuesday by Compass Point, analysts described Bitcoin’s plunge as a “capitulation event,” with 26% of sales over the past 320 days coming from investors who purchased the asset above the $90,000 mark.
“This cohort of top-buyers had been resilient throughout the bear market,” they wrote. “This makes us more confident that BTC's bear market is in late stages.”
