Bitcoin's Upward Trend Encounters Inflation Warning Backed by the Pentagon

As bitcoin appeared to gain momentum to break through the $80,000 threshold, macroeconomic uncertainty has reemerged as a significant obstacle. A notable development came from a classified Pentagon briefing to U.S. lawmakers, indicating that clearing mines in the Strait of Hormuz, a critical oil chokepoint, 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 may remain elevated until the midterm elections, as reported by the Washington Post. The persistence of high energy costs poses a risk of inflation remaining sticky, thereby limiting the Federal Reserve's ability to cut interest rates. This creates a negative backdrop for risk assets, with bitcoin being particularly sensitive to interest rates and global liquidity conditions rather than real economic activity. Moreover, rising costs of essentials such as fuel and food could reduce investors' willingness to allocate capital to speculative assets. These risks are already manifesting in the markets, with WTI crude climbing to around $95 from $79 late last week, while government bond yields are increasing across major economies. The U.S. 10-year yield has risen by eight basis points to 4.32% this week, and its U.K. counterpart has increased by 18 basis points to 4.96%. According to Michael Kramer, founder and CEO of Mott Capital Management, 'Oil prices are rising in tandem with yields and widening volatility spreads, signaling tighter financial conditions and increased market risks.' This excerpt is from the CoinDesk newsletter 'Daybook.' To stay updated, sign up here if you haven't already. In terms of key indicators, U.S.-listed spot bitcoin ETFs continue to demonstrate 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 advising caution, arguing that the rally lacks broad-based support in the spot market. Julio Moreno, head of research at CryptoQuant, noted on X, 'The recent Bitcoin price increase is entirely driven by demand in the perpetual futures market. Meanwhile, spot demand is still contracting, albeit at a slower pace. The same scenario occurred 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. It is essential to remain alert. For further analysis of today's activity in altcoins and derivatives, refer to Crypto Markets Today. For a comprehensive list of events this week, see CoinDesk's 'Crypto Week Ahead.' Current Trends Today's Signal The chart displays the fluctuations in the ratio between bitcoin's price and gold 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 increasing and has now surpassed the 100-day average. More importantly, the 50-day average could soon move above the 100-day average, confirming a bullish crossover. As the name suggests, it indicates a bullish shift in momentum. This would imply continued outperformance of bitcoin relative to gold.