Bitcoin price slipped under $66,000 on 22 July as Fed rate hike expectations surged in the wake of escalating US-Iran tensions, with Brent crude breaking above $95 per barrel and traders repricing the path of monetary policy days before the Federal Open Market Committee (FOMC) convenes.
BTC was changing hands near $65,700 after touching an intraday high of $66,886, according to crypto.news. The retreat came as President Donald Trump threatened on Truth Social to destroy Iranian bridges or power plants in response to any attacks on shipping through the Strait of Hormuz, with targets potentially including infrastructure near Tehran.
The warning followed the collapse of the Islamabad Memorandum of Understanding, a June ceasefire framework that had called for restoring commercial traffic through Hormuz and gradually unwinding the US naval blockade. Iran threatened retaliation against regional infrastructure, and Iran-backed Houthi forces followed with threats to block the Bab el-Mandeb Strait. Seven tankers had already rerouted.
Hormuz Disruption Is Already Measurable
The geopolitical backdrop is landing on a supply crunch that predates this week’s escalation. According to the US Energy Information Administration (EIA), crude oil and petroleum liquids transiting the Strait of Hormuz fell nearly 30% year-on-year in Q1 2026 to 14.6 million barrels per day, a decline of roughly 6 million barrels per day from the prior quarter. Crude oil accounted for 10.7 million b/d of that total; petroleum liquids made up the remaining 3.9 million b/d.
The Institute for Energy Research noted that around three-quarters of that 6 million b/d decline came from crude shipments. The EIA has also flagged that around one-fifth of global liquefied natural gas trade transited Hormuz in 2024, primarily from Qatar, meaning the disruption extends beyond crude oil markets.
Brent climbed to $95.24 before settling near $94.40 on 22 July, a daily gain of more than 3% and the highest level in six weeks.
Fed Rate Hike Odds Climb as Oil Prices Surge
Energy-driven inflation is the transmission mechanism that connects Hormuz to Bitcoin’s price action. CME FedWatch data cited by MarketWatch placed the probability of a July rate increase at 33.7% on 22 July, up from 25.7% the day before. Polymarket traders assigned a 65% probability to at least one Fed hike during 2026, a contract covering the remainder of the year rather than only the July meeting.
That compares with a notably different picture just days earlier. CNBC reported on 13 July that CME FedWatch was already showing a 46.5% probability of a 25-basis-point hike at the 29 July meeting, up from 34% the prior day, while prediction market platform Kalshi placed the odds at 36%, having been under 10% earlier in the month. The divergence from the 22 July CME reading reflects how rapidly positioning has shifted across the two-week window.
Before this oil move, a 14 July Reuters report had shown traders pricing only a 10% chance of a July hike after annual headline inflation slowed to 3.5% in June from 4.2% in May. That disinflationary window now looks fragile. Fox Business reported that June headline PCE inflation fell to 3.7% year-on-year from 4.1% in May, and core PCE dropped to 3.3% from 3.4%, with monthly core PCE rising just 0.1% against a 0.2% forecast. The oil shock risks reversing that progress.
The Federal Reserve’s June 16–17 FOMC minutes showed policymakers were already monitoring energy-driven price pressure, with the committee’s statement reading: ‘Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability.’ Fed staff estimated May headline PCE inflation at 4.1% and core PCE at 3.4%.
Where Bitcoin Price Finds Support and Resistance
On the daily chart, BTC has stayed below Supertrend resistance at $67,303 despite recovering from a late-June low near $58,000. The daily RSI sits at 59.36, above its signal average of 53.96, indicating momentum without overbought conditions.
On the 4-hour chart, BTC has traded inside an ascending channel since early July. Price tested the upper boundary near $66,986 before pulling back. The 78.6% Fibonacci retracement at $65,021 forms the first visible support; a deeper move targets the 61.8% level at $63,478, then the channel floor near $64,000. The 4-hour MACD histogram has turned slightly negative and the MACD line has crossed below its signal line. ADX at 20.62 confirms the trend lacks strong directional force.
Order-book data shared by crypto analyst Ted Pillows showed buy orders concentrated between $64,500 and $65,500, with sell orders stacked from $67,000 to $68,000. Pillows wrote: ‘If Bitcoin breaks above it, a rally to $70,000 will happen quick.’
A second ceiling sits at $69,340, identified by analyst Ali Charts as the short-term holder realised price, a level where every BTC rebound since November has stalled. CoinGlass’s three-day liquidation heatmap shows the largest overhead cluster near $67,300, with dense positions around $68,000 and liquidation pools below at $65,000, $64,400, and $63,500.
The 29 July FOMC decision and any further Hormuz escalation are the next binary inputs. A hold with a dovish statement clears one obstacle; a hike, or a hawkish hold, likely keeps Bitcoin price pinned below the $67,303 Supertrend line through the end of the month.
