Bitcoin climbed from $65,149 to nearly touch $67,000 before falling back to around $66,276. The drop wiped out $250 million in open interest in just one minute through the closure of over $100 million worth of positions, briefly pulling the price down to $65,900.
This upper-level rejection had a clear macroeconomic catalyst outside the crypto market. US crude oil prices rose 2.6% to $84.70 per barrel - its highest level since June 12 - following a military escalation between the US and Iran. US forces have launched strikes against Iran for a 10th consecutive day, accompanied by Donald Trump’s warning that the country “will pay.” Tensions escalated further with reports of tanker damage in the Strait of Hormuz and Houthi threats against Saudi Arabian shipping routes.
What Does This Have to Do with Crypto?
Higher oil prices mean rising energy costs, which could creep into July’s inflation data. If inflation picks up, the US central bank’s room to ease interest rate policy narrows. The US dollar immediately responded by strengthening, putting downward pressure on risk assets like Bitcoin.
This pullback came amid otherwise positive market sentiment fueled by negotiations surrounding the CLARITY Act crypto bill. Treasury Secretary Scott Bessent noted that negotiations on the bill are on the “one-yard line,” while senators indicated that a final vote is drawing near. The agreement includes comprehensive ethics rules approved by Trump, which the White House described as the “most comprehensive and far-reaching ethics provisions in history.”
Crypto-related stocks were buoyed by the news. Coinbase (CRCL) gained 8.6%, Circle 7%, MicroStrategy (MSTR) 4.22%, and BitMine (BMNR) 3.61%. Institutional inflows also continued, with SoSoValue data showing US spot Bitcoin ETFs attracted $227 million in inflows on July 20 - marking a five-day positive streak, the longest run since April.
One Remaining Political Hurdle
Although the bill is near finalization, a tug-of-war remains over who has the authority to enforce the ethics rules. Democrats want enforcement power given to state attorneys general. On the other hand, Republicans and the White House insist authority should lie with the federal attorney general - a position Democrats argue is too vulnerable to Trump’s influence. The final text of the rules has not even been shared with Democratic members, despite the summer recess deadline looming on August 7.
From a technical standpoint, Bitcoin’s price action has yet to establish a dominant trend. The ADX indicator sits at 23.08, below the 25 threshold that typically confirms the start of a trend. The four-hour MACD does show a bullish signal at 592.66 against the 441.46 signal line, accompanied by capital inflows with Chaikin Money Flow at 0.35. However, the market remains sluggish; 30-day spot trading volume stands at just 62% of the annual average, and CME futures open interest is at its lowest level since 2023.
The next resistance for buyers lies at the $68,000 level. This mark serves as the average cost basis for investors entering over the past five months, as well as the mid-June peak before prices briefly broke below $58,000. As long as global geopolitics keeps holding energy prices hostage, institutional momentum in crypto will have to compete closely against inflation. Reported by crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
