Against the backdrop of escalating tensions between the US and Iran, the price of Bitcoin fell below the $62,000 mark. However, as my research shows, the true cause of this movement lies not in the Middle East, but in the Japanese bond market, which is experiencing historic volatility.
According to my data, on July 9, the yield on 10-year Japanese Government Bonds (JGBs) reached 2.9% for the first time in 30 years. In less than a day, it sharply dropped by 16 basis points to 2.71%. This is the largest daily decline since April 2025. For 30-year bonds, the decline was 13 basis points, to 3.87% — the highest value since January 21 of this year.
The sharp reversal occurred after a statement by Japan's Finance Minister about plans to encourage pension funds, including the country's largest GPIF with $1.8 trillion in assets, to increase investments in domestic assets. If this scenario materializes, the structure could gradually redirect part of its portfolio from foreign securities to Japanese government bonds. This would reduce pressure on the domestic debt market and support the yen by curbing capital outflows.
Analysts expect volatility in Japanese debt and currency markets to persist. In my opinion, it is this situation that triggered the move in Bitcoin. I compare the current correction to past episodes, including April 2025, when, after US President Donald Trump announced the imposition of global tariffs on imports, the yield on 30-year JGBs rose by 100 basis points, followed by other markets.
I expect a downward reversal within one to two weeks. According to my forecast, this will automatically lead to a rise in the leading cryptocurrency. At the time of writing, digital gold is trading around $62,700.
On-Chain Analysis: The Market Remains Weak
My on-chain analysis confirms that the Bitcoin market remains weak even without external shocks. I am focusing on the behavior of short-term holders (STHs). The asset has been trading below their acquisition cost for over nine months. Such prolonged periods have historically coincided with bear market phases.
The cost basis for STHs is currently $70,700 and continues to act as resistance. In May, the price tested this level around $82,000 but failed to hold. Since then, the metric has declined — some investors have recently been buying the asset, lowering the average entry price.
The key problem for the market remains weak spot demand. The 30-day moving average of the metric has been negative since December 2025. In mid-June, the indicator reached a low of -273,000 BTC, and now stands at around -100,000 BTC. Part of the demand is shifting to futures, but speculative demand cannot form the basis for a sustainable reversal. Until this dynamic changes, Bitcoin's underlying trend will remain negative.
At the same time, partial market normalization is observed. The CryptoQuant Composite Index v.2.0 currently stands at around 0.484. This is below the elevated risk zone but above levels characteristic of the bottoms of past cycles: near zero in January 2015, 0.05 in December 2018, and 0.13 in November 2022. The situation is described as a partial flush: recovery has already begun, but the depth of the correction has not yet reached levels seen previously.
My expert opinion: The Bitcoin market is in a waiting phase. The debt crisis in Japan creates unique conditions for a global capital shift. If JGB yields continue to fall, as I forecast, this will become a powerful catalyst for Bitcoin growth, potentially exceeding the expectations of most market participants. However, until spot demand recovers, any upward movement will be speculative in nature and may be short-lived.