As bitcoin appeared to gain momentum towards breaking through $80,000, broader economic uncertainties resurfaced as a significant obstacle. A key development came from the Pentagon, which informed U.S.
lawmakers that clearing mines in the Strait of Hormuz, a crucial oil passage, could take at least six months and will only commence after the resolution of the U.S.-Iran conflict. This briefing also cautioned that gasoline and oil prices might remain elevated until the midterm elections, as reported by the Washington Post.
Prolonged high energy costs could keep inflation elevated, limiting the Federal Reserve's ability to reduce interest rates, which is a negative backdrop for risk assets like bitcoin, highly sensitive to interest rates and global liquidity. Rising costs of essentials could reduce investor appetite for speculative assets. These risks are reflected in markets, with WTI crude rising to around $95 from $79 and government bond yields increasing across major economies.
The U.S. 10-year yield has risen to 4.32%, and its U.K.
counterpart has risen to 4.96%. An expert noted that rising oil prices alongside yields and widening volatility spreads signal tighter financial conditions and increased market risks. Despite this, U.S.-listed spot bitcoin ETFs show sustained demand.
However, some analysts urge caution, citing the rally's lack of broad support in the spot market and warning of potential correction risks if traders take profits while spot demand continues to contract. The market capitalization of the largest dollar-pegged stablecoin, USDT, has reached a record high, and speculation in certain tokens is intense, with overcrowding in bullish bets. A key metric to watch is the ratio between bitcoin's price and gold, which has been rising and could confirm a bullish crossover, suggesting continued outperformance of bitcoin relative to gold.