So yesterday I saw an interesting discussion about how the movement of the US Treasury could be a "rare leading indicator" that determines the direction of the Iran conflict and Bitcoin's movement. This is serious, not just market speculation.

The situation is like this: since the Iran war escalation at the end of February, the 10-year Treasury yield has risen about 45 basis points to 4.37%. This figure is very important because it determines borrowing costs across the US economy. But even more crucial is the "resistance line" at the 4.5%–4.6% level. Why? Because it’s at this level that Trump started signaling a delay in major tariffs.

There are two metrics to watch carefully. First, the 10-year Treasury swap spread. According to ING, if this swap spread breaks above 60 basis points, it signals serious trouble that could force the Trump administration to change strategy. Currently, it’s still below 50bp, but the trend needs monitoring. Why is this important? Because a widening swap spread means higher borrowing costs for US debt. Uncle Sam, already heavily indebted, will find it harder to issue new bonds.

Second, the yield itself. If it breaks above 5%, that’s a critical level already identified. Arthur Hayes from Maelstrom Fund says a potential spike to 5% could trigger a mini financial crisis, forcing the Fed to step in with liquidity injections.

Now, why is this important for Bitcoin? Initially, BTC would drop as a spontaneous reaction to risk-off sentiment. But if the Fed starts injecting liquidity—which is very likely if the 10-year yield breaks 5%—Bitcoin could quickly recover and even turn bullish. So this rare market indicator is a moment when the government is forced to intervene, and that’s usually bullish for risk assets.

Right now, Bitcoin is at $71.81K. If Treasury yields continue to rise and swap spreads widen, expect high volatility in the coming month. But don’t forget: every time a crisis signal appears, the Fed and government usually don’t stay idle. They will inject liquidity, and when that happens, risk assets including crypto typically get a strong tailwind.

So the moral of the story: watch Treasury yields and swap spreads more than headline news. That’s what really can determine whether Trump will ease the Iran situation and whether Bitcoin will rally or dump. The bond market is the boss, and we’re just traders following the flow.