Bitcoin's Uptrend Faces Inflation Warning from Pentagon

As bitcoin appeared poised to break out above $80,000, uncertainty resurfaced due to a warning from the Pentagon regarding potential inflation. The Pentagon cautioned lawmakers that clearing mines in the Strait of Hormuz could take at least six months and may only begin after the U.S.-Iran conflict ends, potentially keeping energy costs high. This could lead to sticky inflation, limiting the Federal Reserve's ability to cut interest rates and negatively impacting risk assets like bitcoin, which is sensitive to interest rates and global liquidity. Rising essential costs could reduce investors' appetite for speculative assets. Markets are already reflecting these risks, with WTI crude climbing to around $95 and government bond yields rising. Some analysts urge caution, noting the rally lacks broad support in the spot market and is driven by demand in the perpetual futures market, while spot demand contracts. The market capitalization of the largest dollar-pegged stablecoin, USDT, has hit a record high, and speculation in non-serious tokens is increasing. The ratio of bitcoin's price to gold has been rising, with the 50-day average potentially crossing above the 100-day average, indicating a bullish shift in momentum.