In recent days, geopolitics has been dealing the cards on financial markets, and unfortunately in its most brutal form. A new war in the Middle East forces markets to sharply reshuffle their portfolios, and the specter of completely blocked oil routes awakens the demons of inflation once again. What does this mean for us as cryptocurrency investors? The chances of quick cuts in interest rates may be fading away, which will hit risk appetite hard. But does this mean a lost opportunity to earn money in 2026?
The blockade of the Strait of Hormuz and the search for safe havens by US investors
The assassination of Iran’s leader in Tehran and a whole series of blows on the Washington-Tel Aviv-Iran line caused capital on world stock exchanges to flee from indices and risky assets in a split second.
Direction? As always, safe havens.
The dollar and gold are catching the wind again, while investors cannot keep up with refreshing news about the Strait of Hormuz.
Chart. Gold rate
More than 20 million barrels of oil (20% of world supply) squeeze through this bottleneck every day. Can you imagine that? Closing this route will be a complete disaster for the global economy in the long term.
Natural gas and oil extraction infrastructure and refineries in the Middle East
The reaction on the commodity trading floors was exactly what could be expected.
Brent crude oil shot up to $82 and is now heading even higher.
The problem is that short-term logistical problems will somehow fade away. The problem, however, is that if the conflict lasts for weeks, a barrel of oil will quickly reach “one hundred” or even higher.
This is a real nightmare for the US Fed, because it will significantly increase inflation pressure and probably freeze the cycle of interest rate cuts for good.
Chart. Brent crude oil price
Bitcoin versus geopolitics and Israel’s new war. The surprising power of the cryptocurrency king?
How does Bitcoin fare in all this mess? This is probably the biggest surprise at the moment.
When the worst news about the first US strikes against Iran reached the market, the BTC/USD rate (trading also on weekends) actually dropped to around USD 63,000, but… it recovered faster than many expected.
Currently, the price is forming a local bottom in the range of USD 65,000 – 68,000.
Chart. Bitcoin rate
Honestly, against the background of the heavier Nasdaq, Bitcoin holds up surprisingly well.
Chart. Nasdaq index price
Now let’s throw in some more data. A solid $787.4 million flowed into spot ETFs last week.
Chart. Flows in Bitcoin Spot ETFs
What’s more, a positive premium has finally turned green on Coinbase (after over 40 days of drought). Application? Institutions (“big guys”) are getting into the crypto market again.
And the old stock market truth says that when an asset stops falling despite the constant barrage of bad news, we have probably just hit a local low.
Bitcoin Coinbase Premium Index
What can we expect in the coming days on the cryptocurrency market (BTC/USD) in the face of the US-Iran war in the Middle East?
Sure, on-chain signals look appetizing, but my personal advice is to keep your emotions in check.
Analytical models often react with a delay and may not yet estimate the worst-case scenario of a prolonged war. Of course, if things suddenly calm down and ships return to their routes, we could see a quick relief rally with a stop at $74,000. However, let’s be realistic and let’s lean towards the assumption that the market swing will stay with us for a long time.
If volatility remains at elevated levels and more expensive energy drives up inflation again, capital will begin to flee from risky toys.
In such an environment, BTC’s descent to the support zone (USD 54,000 – 57,000) becomes very likely.
Also keep your finger on the pulse of the American labor market. If new reports again show the strength of the local economy, the Fed will only strengthen its hawkish tone.
And this means another headwind for the bulls in the crypto market.
