Bitcoin's Uptrend Faces Challenges Amid Pentagon's Inflation Warning

Bitcoin's apparent momentum towards a breakout above $80,000 has been met with macroeconomic uncertainty. The Pentagon has warned US lawmakers that clearing mines in the Strait of Hormuz could take at least six months, potentially keeping oil and gasoline prices high through the midterm elections. This could lead to persistent inflation, limiting the Federal Reserve's ability to cut interest rates, which is a negative factor for risk assets like bitcoin. The cryptocurrency is highly sensitive to interest rates and global liquidity conditions. Rising costs for essentials could also reduce investors' willingness to invest in speculative assets. These risks are reflected in markets, with WTI crude prices increasing to around $95 and government bond yields rising across major economies. While US-listed spot bitcoin ETFs are seeing sustained demand, some analysts are urging caution, citing the rally's lack of broad-based support in the spot market. The market capitalization of the largest dollar-pegged stablecoin, USDT, has reached a record high of $188.88 billion. Speculation in non-serious tokens is also on the rise, with overcrowding in bullish bets.