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Key Takeaways:Bitcoin dropped nearly 1 percent to $88,500, as risk markets struggled despite the White House walking back new tariff threats.Rising global bond yields are fueling stagflation fears, with economic growth slowing while interest rates continue to climb.The U.S. 10-year Treasury yield surged to 4.30 percent, reflecting investor concerns about persistent inflation and fiscal uncertainty.February’s U.S. Nonfarm Payrolls Report, due Friday, is now a critical event that could determine the next move for Bitcoin and risk assets.Crypto and Equities Decline as Interest Rate Concerns Take Center StageBitcoin’s brief rally above $91,000 faded, as macroeconomic concerns shifted from trade tariffs to rising interest rates. The Nasdaq, which initially rebounded after Commerce Secretary Howard Lutnick announced Mexico’s tariff exemption, fell 2.3 percent by midday, dragging Bitcoin and other risk assets lower.The sudden shift in market sentiment reflects growing fears of stagflation, a scenario where economic growth slows while inflation remains elevated."The recent move in global bond yields has put me on high alert," wrote Quinn Thompson of Lekker Capital, adding that stagflation has historically been bearish for risk assets.Surging Bond Yields Signal Mounting Economic UncertaintyA sharp rise in global bond yields has raised concerns that central banks may struggle to ease financial conditions without triggering further economic turmoil.Germany’s 10-year Bund yield surged 40 basis points to 2.83 percent, marking one of its worst bond crashes in history.Japan’s 10-year government bond yield (JGB) climbed to 1.51 percent, more than doubling from six months ago.The U.S. 10-year Treasury yield jumped to 4.30 percent, erasing previous declines following Trump’s inauguration.These moves reflect investor skepticism about global economic stability, particularly as Europe faces heightened defense spending and fiscal strain.Stagflation and Its Impact on CryptoHistorically, stagflationary environments are unfavorable for risk assets, including Bitcoin. Rising bond yields increase the cost of capital, making speculative assets less attractive to institutional investors.However, if inflation continues to erode fiat currency value, Bitcoin could regain appeal as a hedge against monetary debasement.Jobs Report Becomes the Next Market CatalystThe February U.S. Nonfarm Payrolls Report, set for release on Friday, is now a key market event that could determine the next leg for Bitcoin and equities.Economists expect payrolls to rise by 160,000, up from 143,000 in January.The unemployment rate is projected to remain at 4 percent.A strong jobs report could push rates even higher, pressuring risk assets further.If employment data exceeds expectations, it may reinforce concerns that the Federal Reserve will delay rate cuts, leading to further downside for Bitcoin.What’s Next for Bitcoin?Key support at $88,000 – If Bitcoin fails to hold this level, a retest of $85,000-$86,000 could be likely.Macroeconomic conditions remain volatile, with bond markets dictating risk sentiment.U.S. jobs data on Friday will be critical in shaping the Federal Reserve’s interest rate outlook and Bitcoin’s short-term trajectory.Final ThoughtsThe market’s focus has shifted from tariffs to rising interest rates, as bond yields surge globally. While stagflation fears remain a risk for Bitcoin, the upcoming U.S. jobs report could be the deciding factor in whether crypto recovers or faces another leg down.