Many people haven't connected these two events: a single-day oil price plunge of over 3%, and BTC rebounding to $64K over the weekend. They are two sides of the same coin. First, let's provide some background. Since the Strait of Hormuz effectively closed from the end of February, the average Brent crude oil price in May surged to $107 per barrel. This has been the main driver of inflation over the past few months — in May's CPI, energy prices jumped 3.9% in a single month, with a 12-month cumulative increase of 23.5%. The entire market has been tense due to this energy price pressure.

Then, Trump called off the strike on Iran, announcing that the two countries are close to reaching an agreement to end the three-month-long war. Oil prices responded with a drop of over 3%. The war premium began to fade. As oil prices fell, another event occurred: risk appetite returned. The logical chain is this — geopolitical tensions eased, uncertainty decreased, funds were willing to shift from safe-haven assets to risk assets, leading to inflows into stocks and cryptocurrencies. BTC's rebound is not just a story about the crypto market itself; it is a branch of the overall risk sentiment warming up. On the same day, the Dow rose 0.70%, and the S&P 500 increased 0.50%, all moving in the same direction.
This is why I have always said that the current market is macro-driven. Instead of looking at candlestick charts for signals, pay attention to headlines from the Middle East. But it’s important to stay calm: the agreement is only "close" for now, and the details are still unclear. On the day CPI was released, Trump also warned Iran that they would "pay the price" for not accepting the deal, which immediately caused the market to be hit again. This emotion-driven recovery, driven by headlines, can be reversed at any time by a counter-news. Coupled with next week's FOMC meeting, volatility will only increase — don’t mistake a rebound for a trend reversal.