Bitcoin's apparent momentum towards breaking the $80,000 barrier has been hindered by renewed macroeconomic uncertainty. A significant development came from the Pentagon, which informed U.S. lawmakers that clearing mines in the Strait of Hormuz could take a minimum of six months and will only commence after the U.S.-Iran conflict is resolved.
The briefing also cautioned that gasoline and oil prices might remain elevated until the midterm elections, as reported by the Washington Post. Persistent high energy costs could lead to sticky inflation, limiting the Federal Reserve's ability to reduce interest rates, thereby creating a challenging environment for risk assets. Bitcoin, being particularly sensitive to interest rates and global liquidity conditions rather than actual economic activity, may be negatively impacted.
Additionally, rising costs of essentials such as fuel and food could reduce investors' willingness to invest in speculative assets. These risks are already manifesting in the markets, with WTI crude rising to around $95 from $79 late last week, while government bond yields are increasing across major economies. The U.S. 10-year yield has increased by eight basis points to 4.32% this week, and its U.K.
counterpart has risen 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.' U.S.-listed spot bitcoin ETFs continue to show sustained demand, with funds experiencing their fastest inflows in a month based on the seven-day moving average of net flows tracked by Glassnode. However, some analysts are urging caution, arguing that the rally lacks broad-based support in the spot market. Julio Moreno, head of research at CryptoQuant, stated, '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. Meanwhile, speculation in non-serious tokens is reaching a fever pitch, with overcrowding in bullish bets. For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today. For a comprehensive list of events this week, see CoinDesk's 'Crypto Week Ahead.' The chart shows fluctuations in the ratio between bitcoin's price and gold, displayed in candlestick format.
The red line represents the 50-day moving average, the white line the 100-day moving average, and the yellow line the 200-day moving average. The ratio has been steadily rising and has now topped the 100-day average. More importantly, the 50-day average could soon move above the 100-day average, confirming a bullish crossover, which suggests a bullish shift in momentum, indicating continued outperformance of bitcoin relative to gold.