A Pentagon briefing stoked inflation concerns. (David Mark/Pixabay)
What to know:
Bitcoin’s latest push toward $80,000 stalled as rising oil prices, driven by risks around the Strait of Hormuz, tightened financial conditions and stoked inflation concerns.
Rising energy costs and higher government bond yields are weighing on risk assets, even as U.S.-listed spot bitcoin ETFs log their strongest week of inflows in a month.
Analysts warned that bitcoin’s recent gains are being powered mainly by perpetual futures rather than spot buying, raising the risk of a decline even as bitcoin continues to outperform gold on a relative basis.
Persistently high energy costs risk keeping inflation sticky, leaving the Federal Reserve with limited room to cut interest rates, a negative backdrop for risk assets. Bitcoin, in particular, remains highly sensitive to interest rates and global liquidity conditions rather than real economic activity. Rising costs for essentials like fuel and food could also reduce investors’ willingness to allocate capital to speculative assets.
These risks are already showing up in markets. WTI crude has climbed to around $95 from $79 late last week, while government bond yields are rising across major economies. The U.S. 10-year yield has increased by eight basis points to 4.32% this week, and it’s U.K. counterpart has risen by 18 basis points to 4.96%.
“Oil prices are rising alongside yields and widening volatility spreads, signaling tighter financial conditions and increasing market risks,” said Michael Kramer, founder and CEO of Mott Capital Management.
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Speaking of key indicators, U.S.-listed spot bitcoin ETFs continue to show sustained demand, with funds seeing their fastest inflows in a month based on the seven-day moving average of net flows tracked by Glassnode.
Still, some analysts are urging caution, arguing that the rally lacks broad-based support in the spot market.
“The recent Bitcoin price increase is completely driven by demand in the perpetual futures market. Meanwhile, spot demand is still contracting (although at a slower pace). The same happened in January, when Bitcoin peaked at $98K. There are risks of a correction if traders start taking profits while spot demand continues to contract,” Julio Moreno, head of research at CryptoQuant, said on X.
The market capitalization of USDT, the largest dollar-pegged stablecoin, has hit a record high of $188.88 billion. Meanwhile, speculation in non-serious tokens such as M$4.5854, is reaching fever pitch, with overcrowding in bullish bets. Stay alert!
Read more: For analysis of today’s activity in altcoins and derivatives, see Crypto Markets Today . For a comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead.”
Oil prices climb as cease-fire uncertainty deepens (The New York Times): Oil prices extended gains while stocks pulled back as investors wrestled with uncertainty about the fragile cease-fire between the U.S. and Iran.
Five reasons global markets are holding up despite war in Iran (Bloomberg): Investors are piling back into the AI trade and emerging-market stocks, signaling that the worst of the volatility is over. The U.S. dollar has mostly given back its gain from the start of the conflict.
Daily swings in BTC-gold ratio in candlestick format. (TradingView)
The chart shows fluctuations in the ratio between bitcoin’s price and gold, displayed 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 rising and has now topped 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 says, it suggests a bullish shift in momentum.
That would mean continued outperformance of bitcoin relative to gold.
Bitcoin broke above $78,000 after weeks of rangebound trading as risk appetite improved following President Donald Trump’s extension of the ceasefire with Iran.
Onchain data show bitcoin balances on centralized exchanges at multiyear lows, suggesting investors are holding on to their BTC and raising the potential for a supply shortage.
