Bitcoin trades in a complex macro environment where geopolitical tensions from the Iran conflict clash with institutional demand and potential Fed policy shifts. The Strait of Hormuz blockade initially pressured risk assets but markets quickly stabilized as oil retreated from $100. Easing inflation expectations support the case for eventual Fed rate cuts while strong ETF demand suggests institutions view current volatility as a buying opportunity rather than a fundamental shift.

Bitcoin briefly decoupled from traditional risk assets during the geopolitical spike, falling harder than stocks initially but recovering faster as institutional flows dominated sentiment.