While most traders are closely monitoring the escalation in the Middle East, the real catalyst for Bitcoin's recent drop to $62,000 lies in a completely different area — Japan's debt market. It is the volatility in Japanese Government Bond (JGB) yields that has a much stronger impact on global risk assets than any geopolitical conflict.
The key event was a historic surge in the 10-year JGB yield to 2.9% on July 9 — the first time in 30 years. However, the very next day saw a sharp decline of 16 basis points to 2.71%. This was the largest single-day drop since April 2025. A similar pattern was observed for 30-year bonds: the yield fell by 13 basis points to 3.87%, marking the biggest decline since January of this year.
The reason for such a sharp reversal was a statement by Japan's Finance Minister about plans to encourage the largest pension funds, including GPIF with $1.8 trillion in assets, to increase their allocation to domestic assets. If these measures are implemented, the funds will gradually begin shifting capital from foreign securities into Japanese government bonds, which will reduce pressure on the domestic debt market and support the yen.
Direct Link to Bitcoin
I drew parallels with historical data: a similar situation occurred in April 2025, when the 30-year JGB yield surged by 100 basis points following the announcement of global tariffs, triggering a massive correction across all markets, including cryptocurrencies. We are now seeing a repeat of this scenario.
Volatility in the Japanese debt market is expected to persist for the next one to two weeks, after which a downward reversal in yields should follow. This, in turn, should become a powerful catalyst for Bitcoin's growth. At the time of writing, the first cryptocurrency is trading around $62,700.
On-Chain Background: Bearish Signal Persists
Beyond macroeconomic factors, fundamental on-chain indicators point to continued market weakness. Short-term holders (STH) have been at a loss for over nine months — Bitcoin is trading below their average purchase price of $70,700, which continues to act as strong resistance.
The main problem is the lack of spot demand. The 30-day moving average of this metric has remained negative since December 2025. In mid-June, demand hit an extreme low of -273,000 BTC, and although it has now recovered to -100,000 BTC, this is insufficient for a sustainable trend reversal. Speculative demand in futures cannot replace real capital inflows into the spot market.
My professional opinion: The link between the Japanese debt market and Bitcoin is not just a coincidence but a reflection of the global correlation between risk assets and liquidity. As long as JGB yields remain volatile, Bitcoin will stay under pressure. However, the downward reversal in yields that I expect in the coming weeks could be the catalyst that breaks BTC out of its prolonged consolidation. But to confirm a bullish scenario, a recovery in spot demand and a firm break above the $76,600 level are necessary — these conditions will be the trigger for a trend change.