Bitcoin's Uptrend Faces Resistance Amid Inflation Concerns Backed by the Pentagon

As bitcoin seemed poised to break through the $80,000 barrier, macroeconomic uncertainty has reemerged as a significant obstacle. A recent classified briefing by the Pentagon to U.S. lawmakers highlighted the potential for prolonged elevated oil prices due to the challenges of clearing mines in the Strait of Hormuz, a critical oil chokepoint, which could take at least six months and only commence after the resolution of the U.S.-Iran conflict. This warning, as reported by the Washington Post, suggests that gasoline and oil prices may remain high through the midterm elections. The persistence of high energy costs could keep inflation elevated, limiting the Federal Reserve's ability to reduce interest rates. This scenario presents a negative backdrop for risk assets, including bitcoin, which is particularly sensitive to interest rates and global liquidity conditions rather than real economic activity. Furthermore, rising costs for essential items like fuel and food could diminish investors' appetite for speculative assets. These risks are already manifesting in markets, with WTI crude climbing to around $95 from $79 late last week, and government bond yields increasing across major economies. The U.S. 10-year yield has risen by eight basis points to 4.32% this week, while its U.K. counterpart has increased by 18 basis points to 4.96%. According to Michael Kramer, founder and CEO of Mott Capital Management, 'Oil prices are rising alongside yields and widening volatility spreads, signaling tighter financial conditions and increasing market risks.' Despite these challenges, U.S.-listed spot bitcoin ETFs continue to see sustained demand, with the fastest inflows in a month based on the seven-day moving average of net flows tracked by Glassnode. However, some analysts advise caution, noting that the rally lacks broad support in the spot market. Julio Moreno, head of research at CryptoQuant, warned that 'The recent Bitcoin price increase is completely driven by demand in the perpetual futures market. Meanwhile, spot demand is still contracting (although at a slower pace). The same happened in January, when Bitcoin peaked at $98K. There are risks of a correction if traders start taking profits while spot demand continues to contract.' The market capitalization of USDT, the largest dollar-pegged stablecoin, has reached a record high of $188.88 billion, while speculation in non-serious tokens is intensifying, with overcrowding in bullish bets. For a deeper analysis of today's activity in altcoins and derivatives, see Crypto Markets Today, and for a comprehensive list of events this week, refer to CoinDesk's 'Crypto Week Ahead.' The chart illustrating the fluctuations in the ratio between bitcoin's price and gold, displayed in candlestick format, shows a steady rise, topping the 100-day average, with the potential for the 50-day average to move above the 100-day average, confirming a bullish crossover and suggesting continued outperformance of bitcoin relative to gold.