The primary market catalyst behind Bitcoin and SPX’s post-election rally is starting to change.

Bitcoin (BTC) and the S&P 500 are increasingly aligning with the rising volatility in Treasury yields, signaling a shift in the market’s dynamics. This adjustment has led to a swift turn in sentiment, with a sharp bearish outlook emerging in just 24 hours.

The primary factor behind this shift is the head-and-shoulders pattern forming on both Bitcoin and the S&P 500, a classic technical indicator that suggests a potential downturn. This pattern coincides with changes in market conditions that were previously favorable for both assets after the U.S. elections.

The MOVE index, a measure of expected 30-day volatility in U.S. Treasury bonds, is at the heart of this change. As the second-largest financial market globally after foreign exchange, volatility in Treasuries has the potential to tighten financial conditions and prompt risk aversion in other markets, including cryptocurrencies.

After hitting a low of 82 in mid-December, the MOVE index has been rising steadily, reaching 102.78 this Tuesday. This spike in the index is due to stronger-than-expected manufacturing data, which has pointed to a resilient economy and persistent inflation. Consequently, Treasury yields have climbed, with the 30-year bond yield hitting 4.92%—the highest since November—and the 10-year yield rising to 4.68%, the highest since May.

This surge in yields coincided with a 5% drop in Bitcoin, which fell to $96,900, and a decline of over 1% in the S&P 500. The strong uptrend in both assets following the U.S. election came to a halt in mid-December as the MOVE index began to increase.

The central takeaway here is that the bond market is now driving the broader market narrative. For risk assets, including Bitcoin, to experience a bullish shift, the Treasury market will need to stabilize. With the MOVE index on the rise, the likelihood of Bitcoin and the S&P 500 completing their bearish head-and-shoulders patterns is growing.