Bitcoin’s Fragile Recovery Amid Geopolitical Turmoil
Nick Pucklin, a cryptocurrency market analyst and founder of Coin Bureau, describes Bitcoin’s recent weekly recovery as “fragile.” This comes as the cryptocurrency landscape grapples with geopolitical and macroeconomic challenges stemming from the ongoing Middle East conflict.
Pucklin remarked, “Even if the war were to cease now, its repercussions are likely to resonate into 2026 and will certainly dominate discussions in the second quarter. We don’t anticipate any rate cuts until late in the third or fourth quarter.”
To see Bitcoin push toward $90,000, he believes a mix of factors is needed, such as a ceasefire to alleviate geopolitical tension, oil prices dropping to around $80, and economic data coming in weaker than expected, ideally easing stagflation fears.
If Bitcoin can hold above $71,000 by the week’s end, it might face resistance around the $74,000 mark, hinting at a potential rally. Right now, it’s trading near $71,276, based on TradingView figures.
The ongoing conflict has heightened inflation and dampened expectations regarding potential rate cuts in 2026, as indicated by the U.S. Bureau of Labor Statistics’ latest Consumer Price Index report. Generally, interest rate cuts and credit easing support rising asset prices.
Bitcoin Faces Setbacks Amid Failed Negotiations
The Kobesi letter notes that Bitcoin had gained about 5.8% since April 6, reaching over $73,000 before declining back to approximately $71,000 on April 11 due to news about failed negotiations between the U.S. and Iran.
“Peace talks seem to have come to a screeching halt,” the Kobesi letter notes, adding, “the outcome of the negotiations was likely the worst-case scenario.”
In reaction to the stalled talks, U.S. President Donald Trump announced that he had commanded the military to enforce a naval blockade around the Strait of Hormuz.
“I have also instructed the Navy to examine and intercept any vessels in international waters that have paid tolls to Iran. Those who make illegal payments will not have safe passage on the high seas,” Trump stated on Saturday.
Members of the Federal Open Market Committee (FOMC), responsible for U.S. interest rate policy, appear divided on the possibility of further rate cuts in 2026, largely due to concerns about inflation driven by war.
The FOMC had not dismissed the option of raising rates if inflation exceeds the targeted 2%, as mentioned in the minutes from the March FOMC meeting.
Based on the CME FedWatch tool, there’s over a 98% chance that the FOMC will keep the current target rate range of 350 to 375 basis points in their next two meetings on April 29 and June 17. In contrast, the probability for a 25 basis point cut at the July 29 meeting drops to about 65%, giving a 33.6% chance of a rate cut occurring.
