TL;DR

  • US and Iran exchanged fresh military strikes overnight; Israeli Prime Minister Benjamin Netanyahu told CNBC that Israel and the US are prepared to strike Iran again if required.
  • Brent crude climbed to $101.70 per barrel and WTI to $96.70 Thursday morning, approaching the $100 psychological threshold as the Hormuz disruption keeps global supply below pre-war levels.
  • Bitcoin fell to approximately $61,300, touching its 200-week moving average and trading well below the $65,878 opening price from the first day of the US-Iran conflict.
  • US spot Bitcoin ETFs extended their outflow streak to a record 13 consecutive trading sessions, with $4.4 billion redeemed across BTC, ETH, SOL, and XRP products; BlackRock's IBIT alone shed approximately $3.3 billion of that total.
  • The S&P 500 dropped 0.74% Wednesday to 7,553.68, retreating from a record close of 7,609.78 the prior session; Thursday morning pre-market shows chipmakers Broadcom (AVGO), Micron (MU), and Marvell (MRVL) under fresh pressure.

Oil has crossed $100 in intraday trading for the first time since April, Bitcoin is testing long-term technical support, and US equity indexes have pulled back from record highs set just 48 hours ago. As of 9:45 a.m. ET on Thursday, June 4, the same driver is repricing all three asset classes: a US-Iran conflict cycling between fragile ceasefire and active escalation, with no clean resolution in sight.

What happened

US Central Command confirmed Tuesday that American and partner forces defeated multiple Iranian ballistic missiles and drones before launching defensive strikes in response. The Strait of Hormuz, which carries roughly 20% of the world's seaborne oil and about 20% of global liquefied natural gas (LNG) supplies, remains under Iranian pressure with throughput at approximately 5% of pre-war vessel counts, according to the UK House of Commons Library.

That exchange came alongside Netanyahu's interview with CNBC's Sara Eisen on Wednesday. The prime minister said Israel and the US are ready to hit Iran again if necessary and relayed that President Trump had warned Tehran of a "full scale return to military action." The New York Times separately reported Iranian drones striking Kuwait's main international airport, adding a fresh spillover point beyond the direct US-Iran-Israel triangle.

Diplomatic signals remain contradictory. Secretary of State Marco Rubio told the Senate Foreign Relations Committee on Tuesday that Iran could negotiate aspects of its nuclear program, keeping a framework deal nominally open. But Iran's state-linked Tasnim outlet reported Tehran was considering fully shutting Hormuz, while Fars news agency said backchannel communications with Washington had gone dark for several days. Trump pushed back on Truth Social, calling those breakdown reports false.

When ChartDojo's overnight feed scan flagged the Central Command statement around 4 a.m. ET, Bitcoin had already dropped more than 1% in Asian session trading before US futures markets opened, reflecting broad risk-off positioning well ahead of the New York open. That pattern is consistent with what we observed in earlier escalation phases covered in Iran Missiles Hit Tel Aviv: Oil and Futures Risk Watch and the prior relief-trade setup in US Stock Futures Jump as Trump Delays Iran Power-Plant Strikes.

Why Iran Escalation Moved Oil, Bitcoin, and Stocks

Oil surged roughly 2% Wednesday because Netanyahu's public "prepared to strike again" language removed whatever slim diplomatic ambiguity Rubio's Senate comments had created the day before. With both sides confirming military readiness on the record, traders have little basis for pricing a near-term ceasefire premium into crude. Brent at $101.70 and WTI at $96.70 Thursday morning are approximately 48% above year-ago levels, per Trading Economics data, and summer demand has not yet added its seasonal weight to a supply picture already strained by the ongoing Hormuz disruption.

The equity pullback is the second-order effect. The S&P 500's record close Tuesday was built partly on AI-sector momentum and partly on the assumption that energy would not reignite inflation quickly enough to shift rate expectations. Brent above $100 on a Thursday morning after another round of military exchanges undercuts that assumption. The S&P fell 0.74% and the Dow fell 1.21% Wednesday as investors recalibrated. Chipmakers including Broadcom, Micron, and Marvell are under additional pressure in pre-market Thursday, reflecting broader tech-sector caution.

Bitcoin's move is sharper and more diagnostic. BTC fell to approximately $61,300 Thursday morning, touching the 200-week moving average -- a long-term support level widely tracked by technical analysts. Bitcoin is now well below the $65,878 price at the open on the first day of the US-Iran conflict, having briefly climbed to $82,000 by May 11 before the risk premium unwound.

Spot ETF flows are amplifying the decline. US-listed Bitcoin ETFs have now recorded 13 consecutive trading sessions of net outflows, the longest-ever streak since their January 2024 launch, with $4.4 billion redeemed across BTC, ETH, SOL, and XRP products combined, per Farside Investors data cited by Cointelegraph. BlackRock's IBIT alone accounted for approximately $3.3 billion of those redemptions. The day before, forced liquidations across crypto derivatives reached $1.8 billion in a single session, the largest since February 2026, per Investing.com. Ethereum tracked lower as well, revisiting February lows and confirming this is a broad macro-driven de-risking event, not a Bitcoin-specific rotation.

Implications for the most impacted trader cohorts

Oil and energy futures traders: Brent briefly breached $101 Thursday morning. Sustained Hormuz pressure combined with the approaching summer driving season is the supply-demand squeeze analysts have warned about. Crack spreads, gasoline futures, and heating oil contracts are secondary indicators worth tracking as refiners adapt to restricted crude flow. A sixth consecutive weekly decline in US crude inventories, reported by the EIA Wednesday, reinforces the supply-tightening narrative.

Equity and index traders: The AI momentum trade in semiconductors has been the primary index driver this spring, but it cannot sustain the index alone if oil holds above $100 and rate-cut timelines shift further out. Energy stocks benefit in isolation, but transport, consumer staples, and discretionary names face rising cost headwinds. Watch whether energy sector gains are large enough on any given session to offset the macro drag on the broader index.

Crypto traders: Bitcoin testing the 200-week moving average at $61,300 is a significant structural moment. A sustained close below that level would represent the first confirmed break of that support since 2022. The 13-day ETF outflow streak at $4.4 billion signals institutional redemption pressure, not just retail selling. Until either a credible Hormuz resolution emerges or forced-liquidation pressure visibly eases, the path of least resistance for BTC remains lower.

Rates and macro traders: Oil above $100 feeds into headline CPI projections with a roughly four-to-six-week lag. That keeps the Federal Reserve in a hold posture longer than equity markets had been pricing earlier this spring. Treasury yields and the dollar both moved in the hawkish direction Wednesday, and that cross-asset configuration tends to cap equity multiples until traders believe the energy shock has peaked or a credible deal timeline emerges.

Potential positives vs negatives

  • Potential positive: Rubio's Senate testimony kept nuclear negotiation language on the table, so a framework deal is not ruled out.
  • Potential positive: The Kuwait airport strike was conducted by drones rather than ballistic missiles, which may indicate Iran is managing escalation pace rather than broadening the conflict freely.
  • Potential positive: Bitcoin touching the 200-week moving average has historically marked meaningful bottoms; some analysts view it as a capitulation signal, per TechTimes.
  • Potential negative: Netanyahu's public "ready to strike again" statement removes diplomatic ambiguity and raises the stakes for any Iranian miscalculation.
  • Potential negative: The 13-day BTC ETF outflow streak at $4.4 billion shows institutional money is leaving the space at the fastest pace since launch, which is unlikely to reverse quickly without a macro catalyst shift.
  • Potential negative: Global crude inventories are drawing down rapidly as summer approaches. A flat geopolitical backdrop from here would still apply upward pressure on oil from the demand side alone.

What could happen from here

Base case: Brent holds the high $90s to low $100s, equities stay headline-driven with shallow swings, and crypto grinds lower until diplomacy produces a credible Hormuz timeline. BTC consolidates near the 200-week MA without a decisive break in either direction. Confirm: no verified diplomatic breakthrough, Hormuz throughput data stays below pre-war levels, BTC fails to close above $65,000 on a daily basis. Invalidate: a ceasefire framework with third-party verification emerges and Brent drops back below $90 within 48 hours.

Upside case: Backchannel talks produce a partial framework, potentially a staged Hormuz reopening tied to a pause in Israeli operations in Lebanon. Oil retreats below $95, equities rebound through recent highs, and crypto recovers toward the high $60,000s to low $70,000s as ETF outflows slow or reverse. Confirm: Reuters, AP, or officials from Oman, Qatar, or other Gulf states confirm a framework with a named timeline. Invalidate: Either party publicly rejects terms or fresh strikes resume during any grace period.

Downside case: Iran moves to operationally close Hormuz more fully, pushing Brent toward $110 or higher. That triggers a policy reset at major central banks, equity index compression, and a capitulation leg in crypto toward $55,000 to $58,000. BTC breaks the 200-week MA on a daily close, accelerating algorithmic stop-loss selling. Confirm: independent shipping tracker data shows Hormuz throughput declining further, major banks revise oil price targets above $110, BTC closes below $61,000 on a daily basis. Invalidate: a rapid diplomatic intervention from Gulf states or China breaks the deadlock before supply deterioration becomes visible in weekly inventory data.

What to watch next (next 24h)

  • US Central Command or White House briefings on any overnight Thursday US-Iran exchanges or changes in Hormuz status.
  • Whether Brent crude sustains its move above $100 or pulls back sharply on any diplomatic headline.
  • Bitcoin's daily close Thursday relative to the 200-week moving average at $61,300: a close above that level is constructive; a confirmed daily close below it could accelerate selling toward $58,000 to $60,000.
  • Bitcoin ETF flow data for Thursday (Farside Investors): whether outflows accelerate, slow, or reverse will be the first read on whether the institutional exit is peaking.
  • Any statement from a mediator state such as Oman, Qatar, or Pakistan confirming active backchannel dialogue.
  • S&P 500 direction at the open and whether energy sector gains are large enough to offset macro drag on the broader index.

FAQ

Why is Bitcoin falling alongside higher oil prices?
Bitcoin is trading as a high-volatility risk asset during this conflict, not as a safe haven. Higher oil prices feed inflation expectations, reduce Federal Reserve rate-cut probability, and strengthen the US dollar, all of which reduce appetite for speculative assets. Crypto, as the highest-volatility asset class in most portfolios, tends to sell off first when macro conditions tighten.

What does the 200-week moving average mean for Bitcoin?
The 200-week moving average is a long-term trend line that aggregates about four years of weekly closing prices. Historically, Bitcoin has found meaningful support at this level during bear market cycles, including in 2018 and 2022. A sustained break below it would be technically significant and could attract further algorithmic selling.

Sources

This market note is for education only. It is not financial advice.

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Feature image: Strait of Hormuz, NASA MODIS Terra satellite image, December 2, 2020. Wikimedia Commons. Public domain.

Header image source: pexels by Marnie Griffiths. License: PEXELS.