Bitcoin price rose for three straight days and remained above the crucial resistance level at $70,000. This recovery, however, could be at risk after Iran announced a major change in its war strategy, as it seeks to punish the US with higher crude oil prices.
Bitcoin Price Could Reverse as Iran Changes War Strategy
The ongoing Bitcoin price rally may be at risk of a pullback after Iran sounded a major warning on the ongoing war.
In a statement, the IRGC said that it would change the strategy from “reciprocal hits” to “continuous strikes”, a move intended to punish Israel and the United States.
Most importantly, the country said that it would continue blocking all ships carrying oil to Israel and the United States from using the Strait of Hormuz, where millions of barrels pass through.
Iran hopes that these actions will drive crude oil prices to a record high of $200. Such a move would lead to higher inflation globally, especially in the United States, which has midterm elections later this year.
A continued closure of the Strait of Hormuz would come after members of the IEA agreed to release 400 million barrels from their Strategic Reserves. This explains why crude oil prices surged today, with Brent and the West Texas Intermediate (WTI) reaching $93 and $88.
Soaring Oil Prices to Trigger Higher Inflation
The soaring crude oil prices are bearish for Bitcoin price as they will lead to higher inflation, making it hard for the Federal Reserve to cut interest rates this year. Polymarket data shows that traders anticipate one interest rate cut this year.
A report released today showed that the US inflation remained above the 2% target in February. The headline and core inflation rose 2.4% and 2.5% in February.
Iran’s threat also means that the war may continue for longer than Trump expects. In a statement today, he said that the war would end soon as the US and Israel were nearing the target and that there was nothing more to destroy.
As such, while the US may want to end the war soon, Iran may continue its attacks for longer to stretch the US military as recent reporting showed that the US was running low on interceptors. A longer war would also punish Trump more by ensuring that oil prices are higher for longer.
BTC Price Prediction: Technical Analysis Points to a Drop
The daily chart shows that the most likely BTC price forecast is extremely bearish as it is in the process of forming a bearish flag pattern. It has already completed forming the flagpole section, and the ongoing consolidation is part of the flag.
Additionally, the Supertrend indicator remains in the red, while the coin sits below the 50-day and 100-day Exponential Moving (EMA). It has also failed to move above the key resistance level at $74,500, its lowest level in April last year.
Therefore, these indicators and patterns suggest that the coin will resume falling, potentially to the year-to-date low of $60,000. Moving below that level will point to more downside, potentially to the psychological level at $50,000.
The bearish outlook will become invalid if the coin jumps above the resistance at $74,500 and turns the Supertrend indicator from red to green.