Bitcoin Rally Fragile as Iran Conflict Clouds 2026 Markets

Nic Puckrin, founder of Coin Bureau, warned that Bitcoin’s recent recovery is fragile as economic effects from the Iran conflict drive higher inflation and reduce the likelihood of U.S. rate cuts in 2026. He said the conflict’s fallout could shape market sentiment into the second quarter.

Bitcoin rose about 5.8% beginning April 6 and briefly exceeded $73,000 before retreating to roughly $71,000 on April 11 after negotiations between the U.S. and Iran failed. Price data showed BTC trading near $71,276 and sitting below its 200-day exponential moving average, with resistance around $74,000. Puckrin noted that a weekly close above $71,000 could indicate continued upside for the cryptocurrency.

The latest U.S. consumer price index showed a pickup in inflation, increasing pressure on expectations for easier monetary policy next year. Minutes from the Federal Open Market Committee’s March meeting showed members remain split on the timing of rate reductions and said they could raise rates again if inflation stays above the 2% target. Market pricing implies a greater than 98% chance the Fed will hold its target range at the next two meetings and roughly a one-in-three chance of a 25-basis-point cut by late July.

Puckrin predicted that even if the war ended immediately, its ripple effects would persist through 2026. “Even if the war ends now, its repercussions will likely be the story of 2026, and certainly the dominant narrative for Q2. I don’t expect to see a rate cut until late Q3 or Q4, if at all,” he added. He said a sustained move toward $90,000 for Bitcoin would require a clear ceasefire, oil falling toward about $80 per barrel, and softer-than-expected U.S. economic data.

Market participants reacted to the collapse of talks with fresh selling pressure, while public statements by U.S. officials about stronger military measures in the Gulf raised near-term shipping and energy supply risk. The U.S. president instructed the Navy to interdict vessels he described as paying illegal tolls to Iran, an action traders flagged as increasing maritime and energy risk.

Analysts and market observers linked the failed negotiations to higher oil and inflation expectations, noting that rising energy costs feed directly into headline inflation. Traders continue to monitor the 200-day moving average and incoming U.S. economic reports for signals on whether the cryptocurrency and other risk assets can regain momentum.