The outbreak of war between the US and Iran reignites inflation concerns! Bitcoin falls below the 200-week moving average "Oil prices-interest rate hike" fear chain strangles risk assets.

The explosion in the Strait of Hormuz rang out again, just as hopes of a revival in the cryptocurrency market were quickly extinguished. In the early Asia-Pacific session on Monday (July 13), Bitcoin fell by 2.4% to $62,600, breaking below the 200-week moving average, considered to be the "bull-bear dividing line". According to CoinGlass data, over 67,000 people were liquidated globally in the past 24 hours, with a total liquidation amount of $236 million. Ethereum also dropped by 2.5%, with US stock index futures, gold, and silver all falling, while international oil prices surged WTI crude oil rising over 3% to $74.1 per barrel, and Brent crude oil rising over 3% to $78.8 per barrel. Strait of Hormuz reignites conflict: ceasefire shattered after only 25 days The confrontation between the US and Iran over the Strait of Hormuz escalated sharply over the weekend. The US Central Command stated that on July 12 at 5pm Eastern Time, the US military launched a new round of strikes against Iran, aimed at "continuing to weaken its ability to attack commercial ships in the Strait of Hormuz". This marks the fourth time in a week that the US military has launched strikes against Iran previously hitting around 140 Iranian military targets, including missile and drone launch sites, naval equipment, and ammunition storage facilities. Iran quickly retaliated. According to Iranian media reports early on July 13, there were over 10 explosions reported in the southern ports of Abadan and Sirik, 5 explosions in Jask, and multiple explosions on Qeshm Island. The Iranian Islamic Revolutionary Guard Corps Navy announced on the morning of July 12 that the Strait of Hormuz would be closed until further notice. Only 25 days have passed since the US and Iran signed a memorandum of understanding, but the ceasefire agreement has now been shattered. The Iranian Foreign Ministry condemned the US government for "almost openly violating all the contents of the agreement". US President Trump, on the other hand, insisted in an interview that the Strait of Hormuz "is open" and shifted the blame to Iran. While both sides are at odds, the market recognizes only one fact: this energy chokepoint, which carries around 20% of global crude oil and LNG transport, is once again in a state of high uncertainty. Market chain reaction: from oil prices to inflation panic The surge in oil prices is triggering the market's most feared transmission path. The rise in oil prices is the starting point of a chain reaction. Brent crude oil has jumped from around $72 to over $78, with an increase of over 3%. With news of a new attack on Iran over the weekend and Iran expanding its targets to Qatar and the UAE, the market is digesting the risks of continued shrinking shipping volumes in the Strait of Hormuz. Inflation expectations are rising accordingly. Energy prices are the most sensitive leading indicator of inflation. The monetary policy report submitted by the Federal Reserve to Congress last Friday has already warned that US inflation will rise further in the spring due to "war-related energy cost increases in the Gulf". Expectations of rate hikes are rising. The dot plot from the June FOMC meeting already showed that 9 out of 18 policy officials expect rate hikes within 2026. The market is worried that if oil prices continue to rise and push CPI above expectations, the Federal Reserve may take a more hawkish stance at the meeting on July 28-29. CME FedWatch Tool shows that the market generally expects at least one rate hike by the Fed this year, with a probability of over 50% for a hike in September. Risk assets are under pressure. Bitcoin, as a non-yielding speculative asset, is naturally less attractive in an environment of rising interest rates. While gold has safe-haven properties, it is also being sold off in the logic of "oil price-induced inflation, inflation-induced rate hikes" spot gold fell below $1,100 per ounce, a drop of over 1%. Richard Galvin, executive chairman of crypto investment firm DACM, bluntly stated: "This sell-off is due to weakness in US stock index futures trading and escalating tensions in Iran pushing oil prices higher." Technical signals flashing red: the historical significance of losing the 200-week moving average The most alarming signal of this decline is Bitcoin breaking below the 200-week moving average. This moving average has been seen as a key support level for every bear market bottom in Bitcoin since 2015. Smoothed over nearly four years of weekly prices, filtering out daily noise, it has accurately captured the bottoms of every major cycle in Bitcoin's history. Currently, this average is around $59,000 to $61,000. Bitcoin closed below this line in June, marking the first time this has happened since the last bear market. Several analysts are warning that if this average fails, the next deeper support level will be around $54,000 to $54,900. IG Australia analyst Tony Sycamore warned: "Higher-than-expected CPI data may enhance market expectations for a rate hike by the end of the year, putting pressure on Bitcoin." A glimmer of hope: ETF ends eight-week outflow streak, but with limited impact Amid a pessimistic atmosphere, there is still a positive signal worth noting. The US Bitcoin spot ETF recorded a net inflow of $197.4 million in the week ending July 10, ending an eight-week streak of net outflows since May. BlackRock, Inc.'s iShares Bitcoin Trust (IBIT.US) was the main driver, attracting a whopping $291.9 million in funds in a single week. However, the strength of this reversal remains inadequate. Since May 11, investors have withdrawn around $8.26 billion from these funds. The latest $197.4 million inflow accounts for only about 2.4% of the previous outflows. As analysts pointed out, this is a "notable sign of recovery, but still in the early stages". This week's "super risk window": CPI + Powell's Congress debut The market's true test lies ahead. On Tuesday, July 14, the US Bureau of Labor Statistics will release June CPI data. The market expects an overall CPI decline of 0.1% month-on-month, with core CPI rising by 0.3%. However, if the actual data comes in hotter considering the lagged effects of the recent surge in oil prices it will directly strengthen expectations of a rate hike by the Federal Reserve. Current CPI is still at 4.2% year-on-year, far exceeding the Fed's year-end PCE forecast of 3.6%. On the same day, Federal Reserve Chairman Kevin Powell will testify for the first time as chairman before Congress. According to the schedule, he will attend a hearing of the House Financial Services Committee on July 14 and a Senate Banking Committee hearing on July 15. The market will closely monitor any changes in his language regarding the rate path, inflation outlook, and balance sheet policy. Powell had already clearly opposed the release of forward policy guidance at the June FOMC meeting, implying that the market will now rely entirely on economic data to judge policy direction. This week's CPI data and Powell's statements will be key factors in determining whether the Fed will hike rates at the July 28-29 FOMC meeting. Sycamore added that if the CPI data matches expectations or falls below them, it will confirm Powell's previous views that inflation pressures are easing. The "oil price - inflation - rate hike" chain is set in motion again Bitcoin is currently experiencing a "passive sell-off" dominated by external macroeconomic forces what is driving prices is not structural changes within the crypto market, but the explosions in the Strait of Hormuz, the sharp rise in oil prices, and the repricing of Federal Reserve rate hikes. Bitcoin's current price is still about 50% lower than its historical high in October 2025, and overall market sentiment remains bearish. With the ongoing escalation of US-Iran conflict, imminent inflation data, and uncertainty about the Federal Reserve's policy path, the volatility in the cryptocurrency market may further intensify. This week's CPI data and Powell's congressional testimony will be key variables in determining whether Bitcoin can hold the $60,000 mark. If inflation exceeds expectations and Powell signals a hawkish stance, Bitcoin may further decline to the "realized price" range of $54,000 to $55,000. If the data is moderate and Powell's language is balanced, the $197.4 million inflow in ETFs may signal an early turning point in sentiment. Currently, the pricing power of Bitcoin is increasingly in the hands of the Strait of Hormuz and the Federal Reserve Chairman's speeches, rather than the narratives within the crypto market itself.