The big news that's stalling momentum comes from the Pentagon. In a closed session, they've told lawmakers that clearing the mines Iran has laid in the Strait of Hormuz isn't a matter of days, but could take at least six months. And the worst part is that this cleanup won't even start until the current conflict ends. This means that oil and gasoline prices are going to stay high for quite a while, possibly until the elections in November.
As you all know, if energy prices are high, inflation won't drop, and if inflation doesn't drop, the Federal Reserve isn't going to want to cut interest rates. This is like cold water for Bitcoin, which thrives on cheap liquidity.
On the charts, we're already seeing it. Oil (WTI) has jumped from $79 to $95 in record time. Plus, bond yields in the U.S. and the U.K. are rising, which means money is getting "more expensive" and investors are becoming more cautious. Bitcoin is currently at $77,400, struggling to maintain momentum.
Interestingly, even though Bitcoin ETFs are still drawing in capital (BlackRock reported massive inflows recently), some analysts like Julio Moreno from CryptoQuant are urging extreme caution. According to him, this latest price push has been driven almost entirely by the futures market, while demand in the spot market (where the actual asset is bought) is shrinking. It's a scenario similar to January when we touched $98k and then corrected. If futures traders start taking profits and there aren't real buyers to hold the price up, we could see a drop below $76,000.
As a color commentary to show how the atmosphere is, USDT's market cap has hit a record high of nearly $189 billion, which means there's a lot of dry powder ready to fire, but there's also dangerous euphoria in tokens like Memecore (M) that often mark market tops.
In times of such geopolitical tension, calmness is our best tool. Don't get swept up by the excitement of futures and always look at what the spot market and macro indicators are doing.
Do you all think institutional demand for ETFs will be enough to ignore the oil crisis and break $80,000, or will the blockade in the Strait of Hormuz end up sending us into a deeper correction?
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