Bitcoin's Uptrend Faces Obstacles Amid Inflation Concerns Backed by Pentagon

As bitcoin appeared poised to break through the $80,000 threshold, broader economic uncertainties resurfaced, posing a challenge to its momentum. Notably, a Pentagon briefing to U.S. lawmakers highlighted the potential for prolonged elevated oil and gasoline prices due to the complexities of clearing mines in the Strait of Hormuz, a critical oil passage. This situation could keep inflation levels stubbornly high, limiting the Federal Reserve's ability to lower interest rates. Such a scenario is unfavorable for risk assets like bitcoin, which is highly sensitive to interest rates and global liquidity rather than actual economic performance. Furthermore, rising essential costs could deter investors from allocating capital to speculative assets. Market indicators such as the increase in WTI crude prices and government bond yields across major economies reflect these risks. Despite sustained demand in U.S.-listed spot bitcoin ETFs, analysts caution that the rally may lack broad support in the spot market, suggesting potential for correction if profit-taking ensues while spot demand continues to contract.