Bitcoin spent Tuesday caught between two forces pulling in opposite directions, and for most of the day, neither one clearly won.
The cryptocurrency opened at $62,259 on Tuesday morning, down 2.3% from Monday’s open, before firming to roughly $62,865 by mid-morning US trading. By the afternoon, prices had climbed further still, with data from The Block showing bitcoin trading near $64,265, up 3.56% on the day, while ether jumped 6.5% to $1,875.
The catalyst for the rebound arrived just before midday: June’s Consumer Price Index came in down 0.4%, a cooler reading than markets expected, driven largely by falling energy costs. The number matters more to crypto traders than it might seem at first glance. High interest rates make speculative assets like bitcoin less attractive relative to safer options, and a softer inflation print reduces the odds the Federal Reserve raises rates at its next meeting, where Chair Kevin Warsh was separately delivering congressional testimony the same day.
“The reaction to the lower-than-expected inflation shows how important interest rates are for the crypto industry,” one market summary noted. A day earlier, bitcoin had faltered on fears that renewed conflict in the Middle East could push living costs higher, which would in turn make a rate hike more likely. On Tuesday, the opposite dynamic briefly took hold.
But the geopolitical backdrop hasn’t gone away
The relief was not built on a clean slate. Overnight, President Trump told Congress the United States was now in what Politico described as a “new war” with Iran, starting a fresh 60-day war clock. Bitcoin fell to a low of $62,600 in the hours before the CPI data landed, as traders exited riskier assets amid growing inflation concerns tied to rising oil prices. Brent crude climbed nearly 4% over the same period, reflecting renewed open conflict between the US and Iran.
According to CoinDesk’s Daybook newsletter, the move reignited what traders have taken to calling the “Nacho” trade, short for “Not a Chance Hormuz Opens”, a bet that the strategic waterway will remain effectively shut. The Strait of Hormuz, which carried about one-fifth of global oil and gas supplies before the conflict escalated, has been de facto closed for 136 days after attacks on tankers reduced traffic through it. Iran reportedly fired ballistic missiles at a US air base in Jordan, and the US struck Iranian targets for five hours in a battle for control of the strait that pushed oil to four-week highs.
Trump separately said the US would reinstate its blockade of Iranian ships attempting to transit Hormuz and would impose a 20% fee on all other cargo passing through the waterway, a move that sent oil prices higher still.
A market still deep in Extreme Fear
Despite Tuesday’s bounce, sentiment across the broader crypto market remains fragile. The Crypto Fear and Greed Index sat at 22, in Extreme Fear territory, having fallen from 28 the previous day. Total cryptocurrency market capitalization stood at roughly $2.23 trillion, down 1.5% over 24 hours, with bitcoin’s dominance holding steady at 56.2%.
Bitcoin remains down 47.7% from its all-time high of $128,198, reached in October 2025, and is now down 2.7% over the past week and 3.4% over the past month. Traders were also increasing their bets on a July rate hike ahead of the inflation data and Warsh’s testimony, according to CoinDesk, a sign that the underlying rate uncertainty driving much of 2026’s volatility has not been resolved by a single data point.
Elsewhere, wallets tied to the US government moved approximately $288 million in seized bitcoin and ether onto Coinbase Prime on Monday, according to blockchain analytics firm Arkham, keeping both networks in the policy spotlight. Separately, exchange trading volumes showed their first monthly increase in five months in June, with spot volume climbing 15.3% to $1.11 trillion and real-world-asset perpetual futures volume surging to a record $311 billion.
Strategy shifts its own playbook again
Michael Saylor’s Strategy, the largest corporate holder of bitcoin, added $450 million to its US dollar reserves this week, bringing total cash holdings to $3 billion alongside its 843,775 BTC position. The move follows a volatile stretch for the company: Fortune reported Strategy had sold $216 million in crypto in the preceding days, its largest single bitcoin sale on record. Strategy also introduced a new metric this week, a “Bitcoin Banking Adoption Index,” which the company says shows major-bank bitcoin adoption currently running at 32%, accelerating, in Strategy’s telling, but still early.
Whether Tuesday’s rebound holds through the week likely depends on two things moving in tandem: whether inflation data continues to cool, and whether the reignited conflict over the Strait of Hormuz produces an actual supply disruption or settles back into the uneasy standoff that has defined much of the past four months.
