Vessel movement through the Strait of Hormuz has nearly ground to a halt, yet the United States has so far refrained from taking concrete action. While the Wall Street Journal reported a “Freedom Project” would resume, US officials denied this. At the moment, the US is waiting to see how Iran responds and has opted for a passive approach during this tense period. Meanwhile, Bitcoin has rebounded to the $80,400 threshold after briefly losing the $80,000 mark.
Turning point for cryptocurrencies
For Bitcoin, $80,400 stands out as a critical level. Although it failed to break through $83,000 on the initial attempt, the presence of strong support at current levels leaves the door open for new rallies. In the short term, increased transfers from short-term holders to exchanges are fueling some selling pressure, but the cost basis for these holders remains intact as a support. According to today’s assessment by On-Chain Mind, Bitcoin and the wider crypto market are now at a decisive juncture.
Bitcoin’s next move will be pivotal: it could either cross $83,000 and continue its upward momentum, or those betting against the price at these levels could find themselves well positioned for a fresh market bottom closer to $56,000.
“Bitcoin has reclaimed one of the most important on-chain regions. Realized losses are decreasing, while profit-taking remains subdued. It appears futures investors may have positioned themselves in the wrong direction. Historically, this is the exact point where bear market rallies often fail.”
If downward pressure from selling continues to intensify, Bitcoin could return to a classic bear market bounce, ending recent optimism. On the other hand, a true breakout could propel the price toward $98,000. Ultimately, time will tell which scenario develops.
On-Chain analysts also highlight the role of ETF investors, whose consistent inflows are lending strong support to Bitcoin’s recent sustained rise.
“Since the start of March, capital momentum through ETFs has remained positive, underpinning the steady and sustained price growth we’ve observed. Persistent inflows translate directly into ongoing price support.”
Although the average ETF cost region initially acted as resistance, continuous ETF investments are emboldening bullish sentiment. On-Chain analyst @anlcnc1 emphasized the crucial nature of the $82,000–83,000 range.
The main risk for cryptocurrencies
Although overshadowed by the Iran situation, a significant shift is expected on May 15, when Warsh is set to assume the chair of the Federal Reserve. The incoming chair is not a proponent of monetary expansion, and the recent surge in inflation stands as the biggest obstacle to bold interest rate cuts. Several Fed officials blame the rally in oil for rising inflation, and even if a diplomatic deal is signed today, it could take months for oil prices to stabilize—meaning energy-driven inflation will likely persist for the foreseeable future.
While this article was being written, Federal Reserve member Hammack addressed ongoing economic uncertainty with a call for policy flexibility.
“I hear worries among businesses that an inflationary mindset has seeped into expectations. In such an environment of uncertainty, it is vital to keep all policy options open for the next steps.”
