US CPI Shocker Meets Fed "New King" Congressional Debut, Will Bitcoin Break the $80,000 Mark?

TradingKey - The US-Iran conflict escalates again, halting Bitcoin's rebound; this week's CPI and Warsh's congressional debut threaten to push it further down.

On July 13, Bitcoin ( BTC) prices fluctuated and weakened, falling back below $63,000 once again. Over the past 24 hours, Bitcoin failed in its attempt to breach $64,000, dropping more than $1,000, or 1.7%, to temporarily trade at $62,754. Bitcoin prices have fallen for three consecutive days, primarily impacted by the US-Iran conflict.

Last weekend, the Islamic Revolutionary Guard Corps Navy, citing a "counter to foreign interference," launched an unannounced attack and intercepted a Cypriot-flagged cargo ship, subsequently unilaterally declaring the "Strait of Hormuz closed indefinitely" in an attempt to choke off a vital global oil passage. The U.S. Central Command immediately launched a powerful retaliation, deploying fighter jets, drones, and warships to bomb over 140 targets along Iran's southern coast, completely destroying its air defense systems and missile sites.

The blockade of the Strait of Hormuz triggered a jump in oil prices, with WTI ( USOIL ) surging more than 4% today to approach the $75 mark. The rebound in oil prices has sparked intense market concern over a resurgence of U.S. inflation, directly dealing a heavy blow to expectations for the June CPI data. If inflation remains sticky due to energy prices, the new Fed Chair, Warsh, is bound to maintain a hawkish high-interest-rate stance in his congressional debut. Currently, the shadow of higher-for-longer interest rates combined with a rebound in inflation has completely stifled Bitcoin's momentum to strengthen further.

Amidst the unfavorable macroeconomic environment, the Coinbase Bitcoin Premium Index reflects a defensive stance among capital. Since May 19, the Coinbase Bitcoin Premium Index has remained in negative premium territory for 55 consecutive days, marking the longest period of negative values on record. This indicates that domestic U.S. institutional investors and high-net-worth individuals are driving a continuous sell-off and capital flight lasting nearly two months, while authentic buying demand representing Wall Street whales has shown no signs of returning.

Coinbase Bitcoin Premium Index, Source: CoinGlass

From a technical analysis perspective, over the past month, Bitcoin's rebound highs and sell-off lows have been continuously declining, forming a downward channel. This indicates that bears are stronger than bulls, continuing to emit bearish signals. This also means that if this week's CPI data and Warsh's stance do not see a reversal, Bitcoin prices are highly likely to continue downward, testing the lower bound of $55,000.

Bitcoin Price Chart, Source: TradingView

Should a bullish scenario unfold this week, CPI could cool down unexpectedly, and Warsh's tone might soften under questioning from lawmakers in Congress. Under this optimistic scenario, Bitcoin could break through $65,000 to reverse its recent downward trend, opening up upside potential to rally toward $80,000. This Tuesday (July 14), the U.S. will release its June CPI data, and Warsh will begin his testimony at the congressional semi-annual monetary policy report hearing on the same day, which will run through Wednesday (July 15).