Forecasts for this week had been bearish, but BTC only began to drop with a delay. The price is currently holding just above the crucial $80,400 support, yet a clear $2,000 loss has already materialized. If today’s upcoming inflation report delivers unfavorable news, mounting concerns over interest rate policy could push cryptocurrencies even lower.
Geopolitical tensions affect crypto
The inability of the United States and Iran to reach a deal to end hostilities has negatively impacted the crypto market. As oil prices surge again and bond yields climb, hopes for the reopening of the Strait of Hormuz in the near term have faded. In a move reminiscent of its response in April, Iran declared this ongoing process a fruitless effort, signaling little progress after weeks of talks.
Continued conflict in the Middle East has prompted markets to scale back expectations for Federal Reserve rate cuts this year. In the scenario of persistently high inflation, the probability of rate hikes rises even further. For the rest of the year, the risk of policy tightening is increasingly dominant.
With negotiations with Tehran at an impasse, former president Donald Trump reportedly met with his national security team to discuss possible next steps, including potential military action. Trump described the deal as “on life support,” and ahead of the midterm elections, a major strike to pressure Iran into an agreement is reportedly one of his remaining options. However, Iran has threatened retaliatory attacks ranging from undersea internet cables to regional energy infrastructure. Such escalation could start a war that lasts for years.
Analysts weigh in on BTC price outlook
Sometimes, delayed analysis from market experts can broaden your perspective. For instance, when BTC hovered around $81,000 yesterday, analyst Ali Martinez shared his outlook. He noted the 200-day SMA at $82,500 as a strong resistance zone for BTC and predicted that the price would find direction based on its reaction at this level.
“A breakout above this point could trigger a rally toward $94,000, but if BTC is rejected, a retest of the 50-day SMA at $75,000 is likely.”
At present, a close below $80,400 opens the way for BTC to target the $78,500 and $75,000 levels. If inflation data comes in at or above expectations, this scenario appears increasingly likely. Nevertheless, since Bitcoin is famous for surprises, certainty is a luxury few can afford in this market.
