New York Fed President John Williams has confirmed that the US-Israel war against Iran is directly driving up inflation through soaring energy prices, even as he insists monetary policy remains "in the right place" to absorb the shock. In an interview with Bloomberg, Williams said the conflict-driven energy shock "will directly go into headline inflation because energy prices are an important component of that," adding that he expects headline inflation to be elevated in the middle of the year and to end 2026 at around 2.75%. Williams warned that as US and Israeli attacks on Iran disrupt oil flows, "it is possible for inflation to go over 3%" on an annual basis in the near term, noting that market pricing now reflects that risk. The Fed President reiterated that he still sees core inflation running at roughly 2.5% this year, implying that most of the additional price pressure will come from oil and refined fuels rather than broader demand.
Bitcoin whale and dolphin accumulation has stalled as holding structure continues to deteriorate, according to latest onchain analysis from CryptoQuant. Bitcoin whale balances are contracting year-over-year at the fastest pace of this year, mirroring the 2022 bear phase when whale accumulation first stalled before turning negative, as reported by CryptoQuant Head of Research Julio Moreno. Monthly balance growth for both whales and dolphins is now close to zero simultaneously, with dolphin monthly growth making lower highs since September 2025 while whale monthly growth has remained flat since February 2026. Dolphin balances continue to post positive annual growth but have decelerated sharply, with annual dolphin growth peaking at +0.97 million BTC in October 2025 and declining materially below trend, confirming that the structural demand engine of this cycle is in a sustained slowdown.
Bitcoin has fallen sharply to around $73,400, down from its peak above $126,000 last October, as the latest JPMorgan analysis reveals that the pandemic-era 'debasement trade' centered on bitcoin and gold is cooling. BlackRock's IBIT bitcoin ETF recorded an outflow of $527.8 million on Wednesday, its second-largest daily outflow since launch, while U.S. spot Bitcoin ETFs recorded $733.4 million in net outflows on Wednesday, marking their largest daily outflows since January 29. The decline extends Bitcoin's retreat from highs above $82,000 earlier this month, as traders increasingly concerned about Brent crude trading above $100 per barrel as Hormuz disruptions choke roughly 20% of global supply. CME FedWatch data showed a 98.9% probability the Federal Reserve holds rates at 3.50% to 3.75% on June 17, with only 1.1% of traders priced in a quarter-point cut. JPMorgan's momentum signal framework also pointed to weakening positioning from momentum-focused traders such as commodity trading advisors, or CTAs, with positioning buildup from those traders losing momentum in both bitcoin and gold over the past one to two weeks.
Technical analysis suggests Bitcoin's relief rally may be over, with the cryptocurrency facing potential decline below $70,000 according to recent market structure analysis. As per AMBCrypto, the $75k area, highlighted in red, was the latest higher low in Bitcoin's former uptrend that reached $82.8k, which was breached on May 23rd, effectively shifting the swing structure bearishly. The price has stalled at the $73k round number, which was also the 23.6% southward extension, with potential bearish continuation toward $51,049 and $36,562 as Fibonacci extension price targets. The 1-day and 4-hour price charts' swing structures have aligned bearishly, indicating that the relief rally of the past two months has finally come to an end. There is potential for a Bitcoin bounce to $75k in the following days, but traders are advised to wait for retest of key resistance levels before selling, with $75.4k, $76k, and $76.9k levels being tested before bearish continuation.
April Personal Consumption Expenditures (PCE) inflation matched the 3.8% year-over-year forecast, its highest reading since May 2023, pushing crypto markets into a higher-for-longer Federal Reserve stance. According to the Bureau of Economic Analysis, core PCE rose 3.3% on the year, also in line with forecasts, sitting at its highest level since October 2023 and nearly doubling the Fed's 2% target. The World Bank now projects that energy prices could surge by 24% in 2026 to their highest level since Russia's 2022 invasion of Ukraine, even in a baseline scenario where the current war's most acute disruptions ease by May. Personal income was flat for the month, missing the 0.4% consensus, while consumer spending rose 0.5% and initial jobless claims came in at 215,000, slightly above the 211,000 expected. Q1 GDP was revised down to 1.6%, adding to the mixed economic signals.
