Bitcoin Price Forecast: New Bombings on Iran Could Plunge BTC to $50K

Bitcoin (BTC) has gone down by 3.5% in the past 24 hours after President Donald Trump announced that the U.S. will resume its attacks on Iran.

The head of state even threatened to “hit them hard tonight” after weeks of a tense and relatively unproductive ceasefire.

“I don’t want to deal with them anymore … as far as I’m concerned, it’s over,” Trump commented during a press conference earlier today.

Oil prices jumped after the President’s remarks, as he also threatened to reimpose a blockade on the Strait of Hormuz that would only affect Iranian ships.

This is bad news for Bitcoin as it further deteriorates the macroeconomic backdrop. Higher oil prices would mean persistent inflation in the United States, which would give the Fed a stronger basis to raise rates, even by 50 basis points if necessary.

Whales Keep Buying in July Despite BTC’s Volatile Price Action

The setback comes at a point when BTC was recovering strongly off the $60,000 mark, in line with a long-dated buy signal we got in the weekly chart.

Analysts now give a 25 basis points rate increase in September a 71% chance, while 33% of economists surveyed by FedWatch are now expecting another rate hike in January.

Today’s decline shows how fragile the crypto market is at a time when geopolitical tensions are at a high point, while the public’s interest has shifted to other corners of the market like artificial intelligence (AI) and hot IPOs like SpaceX.

This is a disappointing turn as net inflows to Bitcoin-linked exchange-traded funds (ETFs) broke a long streak of negative prints three days ago. Investors had poured more than $500 million into these vehicles until yesterday, but outflows will probably resume (and worsen) today.

During the first 8 days of July, on-chain data from Santiment shows that whale wallets had accumulated 10,000 more BTC tokens. This shows that, under the hood, deep-pocketed players believe that we could be either near or at this cycle’s bottom.

We think similarly, but still see a chance for a drop to $50,000 before Bitcoin starts its real recovery.

Bitcoin Could Drop to $50K If This Happens

Heading to the daily chart, we highlighted that the price action formed a bullish W-shaped pattern that typically precedes strong price jumps.

However, for that pattern to be confirmed, the price would have to break the $66,000 area, which did not happen. Now, we are about to retest the $60,000 threshold.

If BTC moves below that mark, the odds of a move to $50K will increase dramatically, in which case, an interesting opportunity to short BTC would open up.

A confirmed break below $60K should confirm a bearish outlook. A short position at this level after a successful retest would yield a 3.5x return if the target is set at $50,000 and the stop price comfortably above the $63,000 area.

The Relative Strength Index (RSI) currently sits at 44. A drop below 40 would confirm that sell signal. Paired with today’s strong volumes, we have plenty of technical markers telling us that the odds of a bearish move below $60K are quite high.