Bitcoin volatile on Iran tensions as geopolitical risks overshadowed positive inflation data. On Wednesday, BTC experienced sharp swings following conflicting catalysts.
Why Bitcoin volatile on Iran tensions despite cooler CPI
The BTC price initially traded above $61,700 after new Consumer Price Index (CPI) data came in cooler. Specifically, the CPI met Wall Street forecasts, putting a stop to worries of quickening inflation.
However, the rally was short‑lived. Traders responded to growing unrest in the Middle East. Consequently, Bitcoin fell to approximately $61,500 and traded under pressure with an intraday loss of about 2% and now back to $62,700.
Nevertheless, the momentum around favorable inflation metrics pushed BTC back above $61,900 during the day, despite the ongoing conflict.
Trump’s warnings to Iran escalate market fears
The downward swing came after U.S. President Donald Trump blasted Iran in a series of Truth Social posts. For example, he wrote: “Iran’s Military is a complete and total mess. Much of it, like their Navy and Air Force, doesn’t even exist anymore – They have been completely defeated.”
He also accused Tehran of delaying negotiations longer than they should have. Moreover, Trump warned: “They’ve taken too long to negotiate a deal that would have been great for them, now they will have to pay the price!”
In another message, Trump praised the U.S. naval blockade in the Strait of Hormuz. He called it “the most successful Blockade in the history of Naval Warfare.” Furthermore, he declared, “NOTHING GETS THROUGH unless we want it to.”
These comments came amid reports that Trump is considering sending a second military force against Iran.
Recent retaliation attacks add pressure
As tensions in the region grew, Iran said they would retaliate against U.S. military bases in Jordan and Kuwait. The war protests reportedly followed the U.S. military attack on Iran after the downing of an American Army helicopter.
There were also reports of activity around U.S. military bases in the Gulf area following Trump’s new posts. CNN reported that a video taken in Bahrain showed a flash of light from near a U.S. base.
Earlier, Israel and Iran’s strikes in Lebanon had already exacerbated bearish sentiment for Bitcoin and the overall crypto market. Therefore, the situation remains highly unstable.