"Bitcoin seemed to benefit from the surprisingly weak performance of precious metals amid an upward Treasury yield rally fuelled by a higher-for-longer interest-rate narrative. The upward inflation risk is driven by rising oil prices due to the war in the Middle East and the closure of the Strait of Hormuz."
"This risk has diminished hopes of a rate cut by the Federal Reserve before September (with only a 46.1% chance), as shown by CME FedWatch Tool figures. That pushed the 10-year Treasury yield up by over 340 points, its largest gain since the beginning of the war."
"The impacts of the war in the Middle East have not yet fully materialised. Many reports and statements from high-ranking officials from the US and Israel also support the idea that the war could last for many weeks before any of the main objectives are achieved."
"A hawkish surprise from Jerome Powell following today's Federal Open Market Committee (FOMC) decision could catalyse a broader trend reversal. Monetary policymakers have maintained a cautious stance on rate reductions amid persistent trade tensions, and the current Middle East conflict introduces a significant secondary layer of macroeconomic instability."
Bitcoin is consolidating around $74K after failing to break above $76K, following eight consecutive days of gains earlier in the month. The cryptocurrency benefited from weak precious metals performance amid rising Treasury yields driven by a higher-for-longer interest-rate narrative. Middle East tensions and Strait of Hormuz closure have elevated oil prices and inflation risks, diminishing Federal Reserve rate-cut prospects before September to just 46.1%. While Bitcoin sometimes acts as a safe haven during crises, poor economic fundamentals can trigger sharp reversals. Ongoing Middle East conflict, potential escalation involving other nations, and infrastructure damage could create prolonged global supply disruptions. A hawkish surprise from Federal Reserve Chair Jerome Powell during today's FOMC decision could catalyze a significant trend reversal.
#bitcoin-price-action #geopolitical-risk #federal-reserve-policy #inflation-and-interest-rates #market-volatility
Read at London Business News | Londonlovesbusiness.com
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