Hormuz Tensions vs Jobs Report: Bitcoin Faces Breakout or Crash

Bitcoin's price has been stuck near $65,000 as it faces conflicting macro forces. On one hand, the US jobs report weakened the case for a September rate hike, which could lead to easier monetary policy and boost inflation fears.

The report showed that the economy lost 23,000 jobs in July, far short of the expected gain of roughly 80,000. This led traders to cut the odds of a September Fed hike from 57% to about 44%. As a result, the two-year Treasury yield fell and the dollar weakened.

However, tensions around the Strait of Hormuz could revive inflation fears and send oil prices higher. The strait accounts for roughly 20% of global oil and petroleum product consumption and 20% of global LNG trade. Any disruption can quickly lift crude prices, which could in turn revive inflation fears.

The current range's ceiling is $69,000, the short-term holders' average acquisition cost. Deribit's implied Bitcoin volatility index shows that options markets are pricing a quiet weekend, but puts made up 53.8% of Bitcoin options volume over the past 24 hours, indicating some traders are hedging against a bigger move.