BTC drops under $66K as oil jitters trigger US inflation fears

• Bitcoin fell toward $66,000 as geopolitical tensions in the Middle East triggered a sell-off in risk assets.
• Global oil supply fears escalated after Iran closed the Strait of Hormuz, driving US Treasury yields to significant highs.
• Market analysts warn that current US inflation trends are unsustainable, potentially forcing the Federal Reserve to pause rate cuts for up to 18 months.

Geopolitical Pressure and Macro Stress

The closure of the Strait of Hormuz by Iran has sent shockwaves through global markets, directly impacting oil prices and risk-sensitive assets like Bitcoin. As Wall Street opened on Friday, the 10-year Treasury note climbed to its highest level since the start of recent conflicts. According to The Kobeissi Letter, the bond market is facing extreme pressure, leading to a rapid shift in investor sentiment.

The current macroeconomic landscape has become increasingly complex:

• Markets have shifted from expecting interest rate cuts to preparing for a potential Fed pause or even rate hikes.
• Inflation expectations have spiked, causing some traders to price in an emergency rate hike as a possible scenario.
• The US-Iran tensions are expected to persist into April, maintaining pressure on global energy supplies.

Technical Outlook and Resistance Levels

The price of Bitcoin has seen a decline of nearly 4% in a single day, putting it on track for its sixth consecutive month of losses—a streak not seen since the end of the 2018 bear market. Traders now view $70,000 as a formidable resistance level that must be reclaimed to invalidate the current bearish momentum.

Analysis from Technical Crypto Analyst suggests that BTC has broken its ascending trendline. The next major demand zone is expected to be between $64,000 and $65,000. Failure to hold these levels could lead to further downside as investors de-risk ahead of the weekend. Adam Kobeissi, founder of The Kobeissi Letter, noted that the market is currently trading as if an emergency move from the Federal Reserve is imminent due to worsening inflation data.