The suspense of inflation data coupled with the situation in Iran puts short-term pressure on Bitcoin, but its long-term structure remains resilient.

Written by: Forbes

Translated by: AididiaoJP, Foresight News

On Monday, July 13, Bitcoin prices showed a significant drop as global financial markets collectively turned to risk-off mode due to the latest geopolitical tensions in the Strait of Hormuz. This event intertwined with other macro factors, creating significant downward pressure on the price of Bitcoin, cooling market sentiment rapidly.

According to real-time data from Coinbase on the TradingView platform, the price of the world's most valuable digital currency briefly fell to around $61,700. Earlier in the session, Bitcoin had momentarily approached a high of $64,400, but ultimately reduced its gains and turned to a decline, ending the day with a cumulative drop of about 4%.

This volatility corresponded with broader stock market performance: major U.S. stock market benchmarks such as the S&P 500 and the Dow Jones Industrial Average also declined that day, indicating a weakening overall risk appetite among investors.

Several market analysts pointed out in interviews that this Bitcoin price adjustment is not an isolated incident, but a direct reflection of changes in the global macro environment. Roy Kashi, co-founder and CEO of Falconedge, analyzed in an email comment: "The recent weak performance of Bitcoin largely stems from the prevailing risk-off sentiment in global markets."

He further explained that the escalating tensions between the U.S. and Iran not only pushed up international oil prices but also rekindled market concerns over inflation while lowering investor expectations for a rate cut from the Federal Reserve in the short term. In this context, investors tend to reduce their exposure to risk assets, including Bitcoin, in favor of safer havens.

Tal Fromchenko, founder and CEO of Leveraged, expressed a similar view and added more specific triggering factors. He stated: "The price falling back to around $62,000 was mainly influenced by the escalation of tensions between the U.S. and Iran in the Strait of Hormuz, triggering a broader sell-off of risk assets."

At the same time, capital inflows through exchange-traded funds have slowed, and after Bitcoin failed to break the key resistance level on Friday, it triggered a significant number of forced liquidations of leveraged long positions." Nevertheless, Fromchenko remains optimistic, emphasizing: "This is just a typical macro-driven washout in a healthy multi-year market cycle, the overall growth structure of Bitcoin remains intact, and the long-term upward trend has not changed."

Himanshu Sahay, co-founder and CTO of the Arch crypto lending platform, interpreted the situation from a market psychology and liquidity perspective. He pointed out in an email: "I believe this decline is not caused by a single event, but rather a comprehensive response of the market to macro sentiment, position allocation, and liquidity conditions, which can often change rapidly in a short period."

Sahay reminded investors not to overanalyze short-term fluctuations, noting that Bitcoin has historically seen sharp price movements during periods of high volatility, with future trends still dependent on the evolution of macroeconomic conditions and the gradual rebuilding of investor confidence.

Saeed Al-Marri, CEO of Ethra Invest, focused on technical aspects and upcoming key data. He analyzed: "From a technical perspective, what we are seeing seems more like a wave of forced liquidations rather than a loss of confidence in Bitcoin by the market. When a large number of traders go long using leverage—borrowing money to bet on price increases—any price drop can reach the loss threshold, forcing exchanges to automatically liquidate these positions."

He specifically mentioned that, currently, the frequency of long position liquidations is six times that of short positions (6 to 1), clearly indicating that what is being cleared are mainly bullish bets, rather than a massive exit by investors from Bitcoin.

Al-Marri further emphasized macro influences: "The bigger driving factor lies in the U.S. Consumer Price Index due to be released this Wednesday, which is the inflation data. If the data comes out higher than expected, it would further delay hopes for a Federal Reserve rate cut, and the higher interest rate environment would make relatively safe assets like bonds and cash more attractive, thus exerting pressure on volatile assets like Bitcoin."

He concluded: "The real core story is not about Bitcoin itself experiencing a structural breach, but rather the entire market is holding its breath waiting for the guidance that the Consumer Price Index number will bring."

Overall, this Bitcoin price correction reflects the immediate impact of geopolitical uncertainty on global risk appetite, but many institutional analysts believe this falls within the normal range of market adjustments and does not change the fundamental nature of Bitcoin as a long-term growth asset. As investors pay attention to short-term fluctuations, they also need to closely track U.S. inflation data and further developments in geopolitical situations this week to better grasp the subsequent market direction.