Bitcoin's Uptrend Faces Hurdle as Pentagon Warns of Prolonged Inflation

Bitcoin's apparent momentum towards a breakout above $80,000 has been hindered by renewed macro uncertainty. A classified Pentagon briefing to US lawmakers revealed that clearing mines in the Strait of Hormuz, a crucial oil chokepoint, may take at least six months and will only commence after the US-Iran conflict ends. The briefing also cautioned that gasoline and oil prices may remain elevated until the midterm elections, potentially keeping inflation high and limiting the Federal Reserve's ability to cut interest rates. This poses a negative outlook for risk assets, including bitcoin, which is highly sensitive to interest rates and global liquidity conditions. Rising costs for essentials like fuel and food may also reduce investors' willingness to invest in speculative assets. These risks are reflected in market trends, with WTI crude prices increasing to around $95 and government bond yields rising across major economies. However, US-listed spot bitcoin ETFs continue to show sustained demand, with the fastest inflows in a month. Some analysts urge caution, noting that the rally lacks broad-based support in the spot market and may be driven by demand in the perpetual futures market. The market capitalization of USDT, the largest dollar-pegged stablecoin, has reached a record high, while speculation in non-serious tokens is increasing. The ratio of bitcoin's price to gold has been steadily rising, with the 50-day average potentially moving above the 100-day average, indicating a bullish shift in momentum.