Bitcoin has retreated to the $62,000-$63,000 range, a level last seen in early February, after a brief recovery failed to hold. The market downturn is linked to high macroeconomic uncertainty and geopolitical tensions, particularly the conflict between the US and Iran, which has impacted global energy supplies and inflation.
The cryptocurrency market showed a fleeting sign of recovery in early May when Bitcoin briefly reclaimed $82,000. That rebound proved short-lived, with Bitcoin now trading at $62,000-$63,000, a level last traded in early February.
Increased outflows from the sector began in October 2025 after Bitcoin reached a new all-time high of $126,080. The trend change was attributed to high macroeconomic uncertainty and rising global geopolitical tensions.
The market faced further pressure in February 2026 after the US launched attacks on Iran. The war disrupted global energy supplies following the closure of the Strait of Hormuz, causing oil prices and inflation to surge.
Inflation in the US climbed to 4.2% in May 2026. The Federal Reserve announced it would keep interest rates unchanged to combat rising inflation, a decision that negatively impacted cryptocurrency prices.
Newly appointed Federal Reserve Chair Kevin Warsh highlighted that inflation was well beyond the Fed’s 2% target. He stated that “prices were still very high.”
A complete market recovery in 2026 will depend on developments in the Middle East. The US and Iran had agreed to a peace deal last week, but doubts have emerged following a re-escalation in the Israel-Lebanon conflict.
According to reports, the Iranians walked out of talks after this re-escalation. President Trump threatened fresh operations if Iran did not stop their “highly paid proxies.”
If the war continues, the Strait of Hormuz may close again, putting additional pressure on oil prices and the larger economy. The cryptocurrency market could suffer further under such circumstances.
