Bitcoin fell below $79,000 over the weekend amid macroeconomic instability and uncertainty surrounding the Iran war. Cointelegraph reported on May 17 that bitcoin’s recent price moves tracked the Russell 2000, a U.S. small- and mid-cap stock index, and that the market is valuing bitcoin as a risk asset rather than a safe haven.

Bitcoin plunged on May 16 after failing to break resistance at $82,000 the previous day. The Russell 2000 is made up of stocks excluding the top 1,000 U.S. companies, meaning it is less skewed toward tech shares and has a higher weighting of firms with relatively weaker earnings bases and financial capacity. That suggests bitcoin moved in the same direction as an index that is more sensitive to funding costs and interest-rate changes.

Demand for bullish bets was also weak in the derivatives market. The annualised funding rate for bitcoin perpetual futures swung sharply negative on May 16, then stayed near 0 percent on May 17. With the measure staying below 6 percent, seen as the neutral line, over the past two weeks, expectations for further gains did not revive despite multiple attempts to break above $82,000.

Moves to reduce risk exposure ahead of the weekend also added to downward pressure. Along with worries the Iran war could drag on, Brent crude rose to $106 from $99 a week earlier. Higher oil prices increase inflation pressure and led to investors pulling money out of bonds.

Bond yields also jumped. Japan’s 10-year government bond yield rose to its highest level in more than 20 years, and the euro zone’s 10-year yield hit a 15-year high of 3.18 percent. As the likelihood grows of liquidity supply to prevent an economic slowdown, some have forecast that funds leaving fixed-income assets could seek other sources of returns.

In the short term, a high correlation with U.S. small- and mid-cap stocks, a lack of demand for leveraged gains, and worries about the Iran war and a recession are deepening bitcoin’s weakness. Still, some observers said that if money leaving fixed-income assets shifts into other assets, it could support a bitcoin rebound in the medium term.