Strait Closure Triggers Crypto Pullback as Geopolitical Risk Reprices

Crypto markets took a hit on Monday after Iran closed the Strait of Hormuz, causing a pullback in Bitcoin and other altcoins. Bitcoin dropped 1.44% as its daily trend began to lean bearish again, with its daily RSI falling to 44.14 but not low enough to be concerned or excited.

Ethereum also confirmed a drop below short-term support, the reaction the source had been waiting for. ETH/BTC printed its second close inside the Cloud in about a week, supporting an expected deeper Cloud close by next week, while bearish divergence clusters on ETH.D and ETH/BTC underpin the source's thesis that ETH should drop much harder with time.

Meanwhile, the Dollar Index is facing a CPI fork while US equity structure remains strong. The DXY may bounce to the Fast line if inflation remarks from the Fed create an alternative scenario, which would pressure the Euro and could lift USDJPY to its Fast line, closing a recent bearish reversal warning.

Oil and metals are repricing geopolitical risk after Iran's Strait closure drove WTI up 6.65% on Monday, with the source hoping for one more push to close the upper gap. Gold continues to rally with an immediate target around $4,542, while Silver is approaching long-term overhead resistance.