Bitcoin cycle low expected in Q4 amid inflation and Iran war

Bitcoin fell below $60,000 this week and showed a modest recovery around the latest weekly close. Traders expect a short relief rally but many still predict the cycle low will occur later in the year. Market participants point to upcoming May US inflation readings, ongoing US-Iran hostilities and very weak crypto sentiment as immediate pressures.

Trader Lennaert Snyder wrote on X that the previous weekly candle “closed very bearish, and left an imbalance at 72.5K,” adding that “as long as we hold the 59.1K previous weekly low, my final long target for this week is that 72.5K imbalance.” Mark Cullen wrote followers that he expects “a bit more sideways and up for the rest of June” and does not expect the ultimate market low until “middle to late Q3.” Crypto commentator ColinTalksCrypto forecast a one- to three-month rebound followed by a drop to a new low in Q4, noting Bitcoin closed below the 200-week simple moving average. Analyst Michaël van de Poppe wrote he expected prices to dip slightly into the Monday open, then show upward momentum after US markets open.

Macro data this week centers on May Consumer Price Index and Producer Price Index releases for the United States. April readings reached multiyear highs. CME Group FedWatch probabilities shifted recently, with the baseline implying two rate hikes by early 2027 and placing about a 17% chance on three hikes by April 2027, compared with earlier expectations of multiple rate cuts in 2026. Volatility has emerged in other markets: South Korea’s main index was halted after opening down about 8%, and some investors moved from bullish options positions to downside protection.

Hostilities linked to the US-Iran conflict continued to affect risk premia. Intermittent exchanges of fire and air strikes kept markets on edge despite public remarks about peace talks. West Texas Intermediate crude oil traded above $95 per barrel early in the week.

Onchain analytics flagged indicators of reduced speculative excess. CryptoQuant noted a decline in the spent output profit ratio for long- and short-term holders, overall BTC supply held in profit near 47 percent, and a return to the 200-day simple moving average for the first time since 2023. The firm also highlighted a relative demand shortage as capital flows favored technology stocks in recent months.

Sentiment measures remained deeply negative. The Crypto Fear & Greed Index registered 8 out of 100, in the “extreme fear” range. Research platform Santiment reported the highest level of pessimism since mid-February and noted that historically similar periods of broad market despair have often occurred close to cycle lows.

Traders differ on timing: some expect a Q4 bottom, others project a low in mid-to-late Q3 or a temporary rebound before a later drop. Market participants said they will watch CPI and PPI prints, Fed policy expectations and geopolitical developments for signals on price direction.