Cryptocurrency Research Report: BTC Returns to $80k, US-Iran Situation Reverses, Federal Reserve Chair Change

Summary

In early May 2026, the global crypto market exhibited extreme divergence and high uncertainty under the joint disturbance of three macro variables. Geopolitically, Trump announced the launch of the “Freedom Plan” to escort commercial ships through the Strait of Hormuz on May 4, only to dramatically suspend it a day later, claiming “significant progress in the U.S.-Iran comprehensive agreement,” but Iran insisted it was still at war with the U.S. and continued to close the strait, requiring all transit ships to obtain Iranian permission. On the Federal Reserve front, around May 15, Waller will officially succeed Powell as Chair, while the March 30 FOMC meeting was held as scheduled with no change. The Beige Book showed a sharp rise in energy prices had put comprehensive pressure on business costs across 12 districts, prompting Goldman Sachs to raise its year-end core PCE inflation forecast to 2.6%. Amid these macro headwinds, Bitcoin rebounded strongly from a February low of $60,000, regaining the $80,000 level, but the continuation of macro pressures leaves uncertainty about whether the rebound can be sustained. Meanwhile, institutional behavior showed rare “contrarian accumulation”: on May 1, net inflows into US spot BTC ETFs reached $630 million, with BlackRock’s IBIT taking in $284 million and Fidelity’s FBTC recording $213 million. Overall, the tug-of-war between macro pressures and institutional bullishness is entering a critical phase, with market direction depending on the resonance of geopolitical, Fed, and institutional capital variables.

I. Geopolitical Game: The Reversal of the Hormuz Strait “Freedom Plan” and Resurgence of Inflation

On May 4, 2026, U.S. President Trump announced on Truth Social that the U.S. would officially launch the “Freedom Plan” escort operation for ships in the Strait of Hormuz that morning, deploying missile destroyers, over 100 land-based and sea-based aircraft, multi-domain unmanned platforms, and 15,000 active-duty troops. The U.S. characterized this as a “defensive humanitarian action” aimed at bypassing the 60-day authorization limit for military actions under the War Powers Resolution. However, just a day later, Trump issued a statement announcing that, given “significant progress in the U.S.-Iran comprehensive agreement,” the “Freedom Plan” would be suspended, but emphasized that the maritime blockade against Iran “will continue to be fully enforced.” This dramatic reversal caught global markets off guard, with crude oil prices fluctuating sharply after the announcement.

Iran’s stance was far more hardline. Supreme Leader’s foreign policy advisor Velayati explicitly stated that the Strait of Hormuz had been closed and would not reopen unless “the will of the Islamic Republic of Iran” decided so; all ships planning to pass through the strait must submit applications via official channels and obtain Iranian permission before proceeding. The Chairman of Iran’s Parliament’s National Security Committee warned that any foreign armed forces (especially U.S. troops) approaching or entering the Strait of Hormuz would be attacked. The positions of both the U.S. and Iran are sharply divided on issues such as the nature of the ceasefire, passage rights through the strait, and whether the “Freedom Plan” is truly suspended. The market’s pricing of geopolitical risks remains far from relaxed.

The immediate consequences of this geopolitical game are preliminarily reflected in global inflation data. Driven by the ongoing escalation of U.S.-Iran military tensions and the UAE’s announcement on May 1 to exit OPEC+, international oil prices continued to rise from late April to early May, significantly boosting energy prices. Goldman Sachs then raised its year-end core PCE inflation forecast from 2.5% to 2.6%, with overall PCE forecast increasing from 3.1% to 3.4%. Notably, this inflation push is not driven by demand overheating but by supply shocks (oil prices) combined with tariff effects, complicating the Fed’s policy response—hesitant to raise rates for fear of economic slowdown, yet unable to cut rates due to rising inflation expectations. For Bitcoin, this “stagflationary” macro environment historically exerts a dual pressure: its safe-haven attributes are not yet widely recognized, and liquidity contraction expectations continue to suppress risk asset valuations.

II. Before the Fed Chair Change: Beige Book Warnings and the Crossroads of Policy Independence

In mid-May 2026, the Fed will experience one of the most controversial leadership transitions in history: Kevin Warsh will officially succeed Jerome Powell as Fed Chair. Powell’s decision to remain on the Board after stepping down as Chair breaks a 75-year tradition and is widely interpreted as a political compromise between the White House and the Fed, indicating a “partial decoupling.” Warsh’s policy stance shows a subtle “hawk-dove mix”: hawkish on inflation control and balance sheet management, emphasizing monetary discipline and framework restructuring, having publicly criticized the Fed’s past 20 years of ultra-loose policies as “seriously deviating from its mission”; but dovish on long-term interest rates, recognizing technological progress’s natural dampening effect on inflation, and supporting rate cuts when data permits. This mixed stance fuels market disagreement over the “Warsh era” monetary policy path and is a key source of macro uncertainty in May’s crypto pricing.

The April 30 FOMC meeting, Powell’s last as Chair, was held as expected with the federal funds rate maintained at 3.50%-3.75%. The post-meeting statement and Powell’s press conference conveyed complex signals: on one hand, rising energy prices are “beginning to show effects on inflation and may further widen in the short term,” with Powell explicitly stating “no officials currently support rate hikes, but some favor reducing the dovish tone in the statement”; on the other hand, Powell emphasized that he “will not be a shadow chairman” after leaving, attempting to reassure markets about the Fed’s policy independence. However, within days, internal dissent surfaced: Trump-nominated Board member Stephen Miran voted against rate cuts, while hawkish officials like Cleveland Fed’s Mester and Minneapolis Fed’s Kashkari also voted against (but for maintaining the status quo). The intense disagreement within the Fed casts a shadow of high uncertainty over Warsh’s first policy meeting as Chair.

The April 16 Beige Book offers valuable grassroots insights into the U.S. economy. It shows that 8 of 12 districts are experiencing modest to moderate growth, 2 are essentially unchanged, and 2 are slightly contracting. The most notable inflation-related comment is: “Energy and fuel costs have risen sharply in all 12 districts,” with firms reporting input cost increases exceeding sales price hikes, squeezing profit margins. Businesses are becoming more cautious in hiring, pricing, and capital investment, with “wait-and-see” becoming the most common strategy. For crypto assets, the core signal from the Beige Book is: while the U.S. economy has not fallen into recession, energy inflation is eroding growth momentum, and the Fed’s rate cut path will be more complicated than previously expected. This macro backdrop remains a medium-term headwind for the liquidity-sensitive crypto market.

III. Institutional Deep Water: ETF Contrarian Flows and Miner Balance Sheet Optimization

Against the backdrop of Bitcoin’s sharp retracement from its highs, contrarian institutional buying has become the most notable structural signal in the crypto market in May 2026. According to SoSoValue data, on May 1, net inflows into US spot Bitcoin ETFs reached $630 million, with BlackRock’s IBIT leading at $284 million and Fidelity’s FBTC recording $213 million. On May 4, spot ETF inflows again totaled $532 million. This capital flow shows a significant divergence from Bitcoin’s price trend: while prices oscillated between $76,000 and $81,000, ETF inflows continued steadily, indicating institutions are building positions during price weakness rather than chasing the market. By early May, the total net assets of US spot BTC ETFs reached $103.78B, about 6.66% of Bitcoin’s total market cap. The rising share of institutional holdings is fundamentally changing Bitcoin’s price discovery mechanism—from a retail-led, highly volatile speculative asset to a more institutional allocation.

From a broader macro perspective, the deepening institutionalization is reshaping Bitcoin’s supply-demand balance sheet. Since the approval of the US spot Bitcoin ETF in January 2024, ETF channels have absorbed over 580k BTC—equivalent to about three years of Bitcoin network issuance. Meanwhile, the supply held by long-term holders has continued to rise since mid-February 2026, indicating that during the price correction, long-term investors’ willingness to hold has increased rather than decreased. This “institution + long-term holder” double-locking pattern is causing the actual circulating supply of Bitcoin to shrink, providing an implicit support level for prices amid macro headwinds.

IV. Bitcoin Reaching $80,000 Again: Halving Cycle Patterns and the Bull-Bear Dialectic at the Current Node

As of early May 2026, Bitcoin is playing out a key narrative of a strong rebound from a deep correction. BTC briefly fell to around $60,000 in early February, then rebounded strongly in early May, regaining the $80,000 level, with a rebound of over 33% from the recent low. This “return to $80,000” still retraces about 46% from the all-time high set in October 2025, but compared to the brutal panics and miner shutdowns during the 2018 and 2022 bear markets, this correction shows a different structural character: ETF inflows persist, long-term holders’ positions are rising, and leading miners are still optimizing their balance sheets rather than exiting. These signals suggest that this is more likely a “deep correction within a bull market” rather than the end of a bull cycle.

Looking at halving cycles, Bitcoin completed its fourth halving in April 2024 (block reward from 6.25 BTC to 3.125 BTC), and historical data shows that the 12- to 18-month period after halving is typically the most intense phase of price discovery. Post-2012 halving, BTC broke previous highs about 12 months later; after 2016 halving, about 17 months later, a major bull run began; after 2020 halving, about 12 months later, a cycle high was reached. Using this pattern as a reference, the 12- to 18-month window after the April 2024 halving corresponds roughly to April 2025 to October 2025, which is the current period. This suggests that the current price adjustment is likely part of a “shakeout and buildup” after halving, not a top reversal. However, whether this pattern remains valid in an environment of increased institutionalization is highly uncertain.

Technically, the key trading range after “returning to $80,000” is between $76,000 and $83,000. The $80,000 level is a critical psychological and short-term support, while $83,000 is the 200-day simple moving average and a key “bull-bear dividing line”; a confirmed daily breakout above this could target $89,000–$94,000. On the downside, $76,000 is a recent test low from April 2026; if broken, technical targets point toward $70,000–$65,000. Momentum indicators show RSI-7 at 71.27, approaching overbought territory, suggesting short-term correction risk; but MACD has formed a bullish crossover since mid-April, supporting medium-term upside momentum. The most reasonable current assessment is that BTC is in a “confirmation phase after returning to $80,000,” with range-bound oscillations likely to continue for 2–4 weeks until macro catalysts emerge.

V. Outlook: Three Scenario Analyses and Key Observation Points

Integrating the three main threads—geopolitics, Fed policy path, and institutional capital flows—crypto markets from May to July 2026 may evolve along the following three scenarios.

Scenario 1 (about 35% probability): Geopolitical easing + dovish Fed signals, BTC challenges $89,000–$94,000. If Iran-U.S. negotiations within the “Freedom Plan” suspension window reach a substantive framework agreement, the Strait of Hormuz returns to normal passage, oil prices decline from high levels, and inflation expectations cool; simultaneously, Warsh’s first public speech after taking office on May 15 signals dovishness. The two positive signals together could trigger a macro “double trigger”: risk appetite recovers sharply, ETF inflows accelerate, and BTC could break through $83,000 (200-day MA) within 2–4 weeks, aiming for the $89,000–$94,000 zone. Key observation points include: Warsh’s speech around May 15, April U.S. non-farm payroll data, and phase progress in U.S.-Iran negotiations.

Scenario 2 (about 45% probability): Geopolitical deadlock + cautious Fed, BTC remains in a $70,000–$85,000 range. This is the most balanced market expectation. If within the 4-week ceasefire window, Iran and U.S. fail to reach a comprehensive deal but also avoid large-scale conflict, the Strait remains “semi-blocked”; the Fed maintains a “data-dependent” stance after Warsh’s appointment. Under this scenario, BTC is likely to oscillate within a broad range, with ETF flows being the most immediate driver—if weekly net inflows stay above $300 million, prices tend toward the upper bound; if weekly outflows recur, prices test the lower support. Range trading is the most suitable strategy here.

Scenario 3 (about 20% probability): Geopolitical escalation + runaway inflation, BTC retraces to $65,000–$70,000. If ceasefire agreements break down completely, Iran announces full blockade of the Strait, oil prices surge past $120/barrel, and Goldman Sachs’ year-end PCE forecast is further raised; hawkish Fed officials discuss “raising rates as needed to combat inflation.” This macro “perfect storm” would impact liquidity expectations and risk appetite simultaneously, potentially pushing BTC below $70,000. Although less likely, such a scenario would trigger systemic liquidations of leveraged positions. In this case, cash and short-term government bonds are the best holdings, and Bitcoin should be re-entered only after macro turning points are confirmed.

VI. Conclusion: Recognizing Structural Signals Amid the Macro Fog

The crypto market in May 2026 is at a historic crossroads of geopolitics, monetary policy, and institutionalization. The dramatic reversal of the “Freedom Plan,” the leadership change at the Fed, the validation of halving cycle patterns, and the persistent contrarian accumulation via ETFs together form an extremely complex yet rich macro chessboard. For investors, the key to navigating this phase is to distinguish “noise” from “signals”: geopolitical back-and-forths and Fed hawk-dove debates are essentially short-term noise—they influence prices from intraday to weekly but do not alter the structural trend indicated by deepening institutionalization and halving supply contraction.

Macro headwinds are often the best friends of long-term allocators. The macro pressures Bitcoin faces in May 2026—rising oil prices, uncertain Fed hawk-dove stance, ongoing geopolitical conflicts—are milder compared to the darkest moments of the March 2020 “liquidity crisis” and the 2022 “FTX collapse + aggressive Fed rate hikes.” Meanwhile, the continuous rise in institutional holdings, the expansion of ETF product lines, and the ability of top miners to optimize capital structures during downturns all silently tell a larger story: Bitcoin is gradually evolving from a marginal speculative asset into a permanent member of the global asset allocation landscape. This process is volatile but directionally clear. Key variables to watch include: first, Warsh’s speech around May 15, which will influence rate cut expectations; second, the substantive progress of U.S.-Iran ceasefire negotiations within the 4-week window, which will shape oil and inflation expectations; third, if weekly net inflows into U.S. spot BTC ETFs exceed $500 million for two consecutive weeks, it will be the most direct signal of accelerated institutional accumulation. The macro fog will eventually clear, and those who maintain discipline and identify structural signals amid the fog will be the most composed winners in the next cycle.