These forces could push Bitcoin higher this week even as US-Iran tensions continue to rattle markets

A notable development has hit the crypto markets. Bitcoin is entering one of its most consequential trading weeks since its February correction, with Middle East tensions pushing oil prices higher, inflation expectations hardening, and options traders positioning for a possible break above $85,000. According to 's data, the largest digital asset briefly dipped on Sunday after President Donald Trump rejected Iran’s latest response to a US peace proposal, then recovered above $82,000 before easing near $81,034 as of press time. The move kept Bitcoin inside the narrow range that has defined trading in recent weeks, even as geopolitical risk continued to feed into energy markets and rate expectations.

Notably, Trump called Iran’s counteroffer “TOTALLY UNACCEPTABLE” after Tehran sought war reparations, the unfreezing of blocked financial assets, and recognition of its sovereignty over the Strait of Hormuz. The waterway has become the main channel through which the US-Iran conflict is reaching global markets, given its role in the movement of oil and liquefied natural gas. That continued market tension has created a difficult setup for Bitcoin, as a prolonged oil shock can keep inflation sticky, delay Federal Reserve rate cuts, and pressure speculative assets.

Market Dynamics

Yet Bitcoin has continued to hold near $80,000, while options data, fund flows, and Washington’s crypto calendar suggest traders may be underestimating the risk of an upside squeeze. Oil shock puts inflation back at the center The immediate test comes Tuesday, when the Bureau of Labor Statistics releases April consumer price index data. Markets are bracing for a reacceleration in headline inflation after the surge in global oil prices, with economists expecting CPI to rise 0.

7% from a year earlier, up from 3. Core CPI, which excludes food and energy, is expected to hold near 2. March already showed the strain from higher energy prices.

CPI rose at the year's fastest annual pace, with the energy component surging as gasoline prices climbed. That has made April’s report a direct test of whether the oil shock remains contained in headline inflation or is beginning to filter into broader goods and services prices. David Auerbach, chief investment officer at Hoya Capital, said the coming data slate could shape expectations for the Fed’s policy path, with CPI on Tuesday, followed by producer prices on Wednesday, retail sales on Thursday, and jobless claims later in the week.

Market Impact

He said headline CPI is expected to show a notable reacceleration tied to oil, while core CPI will be watched for signs that energy costs are moving into broader categories. Prediction markets have leaned toward the same sticky-inflation view. Polymarket traders assigned a 100% probability that 2026 inflation tops 3% and a 94% probability that it exceeds 3.

5%, while Kalshi pricing showed April CPI above 3. Polymarket traders also showed a 55. 6% probability that the Fed will deliver no rate cuts in 2026, while traders assigned a 95.

5% probability to the June Federal Open Market Committee (FOMC) meeting ending with rates unchanged. However, the counterpoint is coming from real-time inflation gauges. Truflation’s US inflation index has been running near 2% year over year, with its methodology designed to track price changes daily rather than through the lagged monthly process used in official CPI data.

Crypto markets are watching this development closely as investors weigh its potential impact on prices.