Bitcoin has dropped beneath the $77,000 mark early Monday, marking a continuation of the weekend slide that saw the largest cryptocurrency give back gains after a brief flirtation with $80,000 last week. The retreat comes at a time when elevated bond yields and climbing oil prices are weighing heavily on risk assets.

Oil prices have surged above $110 per barrel, driven by renewed tensions surrounding Iran and reported drone incidents in the United Arab Emirates. These developments have disrupted diplomatic efforts, fueling worries about future supply interruptions and stoking inflation concerns globally.

The spike in energy costs has rippled through financial markets, sending the benchmark U.S. 10-year Treasury yield to highs not seen since early 2025. This jump has dampened enthusiasm for more speculative investments like Bitcoin, as safer fixed-income assets become comparatively more attractive.

Market participants are adjusting their expectations on Federal Reserve policy accordingly. The likelihood of rate cuts this year seems to be diminishing, with futures traders now pricing in the possibility of a rate hike before the end of 2026. This shift is making growth-focused assets less appealing.

Adding fuel to market jitters, President Donald Trump issued a stark warning over the Iran negotiations, emphasizing that “time is ticking” for a diplomatic resolution. The specter of regional conflict has further pressured markets, pushing investors toward caution.

Ethereum, the second-largest cryptocurrency, witnessed a decline of around 3% to $2,122. Other altcoins including XRP, Polygon, and Solana also retreated amid the broader risk-off sentiment sweeping across digital assets. Even popular meme coin Dogecoin took a hit, slipping more than 2%.

Bitcoin’s struggle to maintain momentum above $80,000 despite steady institutional interest and inflows into spot Bitcoin ETFs highlights the tug-of-war between optimistic crypto bulls and cautious risk managers wary of an inflationary backdrop.

With Nvidia’s earnings report looming later this week, markets could see further shifts in risk appetite driven by sentiment in tech stocks, which often set the tone for early market direction. The intersection of geopolitical unease, monetary policy uncertainty, and commodity price swings makes for a complex environment for crypto and equities alike.