For a deeper dive, see our full XRP forecast here.
Bitcoin Dips as Iran-Israel Conflict Draws US Threat
While XRP slid amid legal developments, bitcoin (BTC) faced selling pressure as investors reacted to an escalation in the Iran-Israel conflict. Reports of US fighter jets relocating to the Middle East fueled fears of a US strike on Iranian sites, potentially triggering a broader regional conflict.
A prolonged conflict could lead to oil supply disruption and higher WTI crude oil prices, potentially fueling inflationary pressures. A higher inflation backdrop would force the Fed and other central banks to delay further policy easing, impacting demand for risk assets. WTI surged 5.17% on June 17, closing at $73.455.
Remarking on news of reaching out to Iran for peace talks, President Trump stated:
“I have not reached out to Iran for ‘Peace Talks’ in any way, shape, or form. This is just more HIGHLY FABRICATED, FAKE NEWS! If they want to talk, they know how to reach me. They should have taken the deal that was on the table – Would have saved a lot of lives!!!”
The US President later called for Iran’s unconditional surrender. Speculation about the US joining the conflict has intensified. On June 17, the Kobeissi Letter reported:
“Israeli officials say Prime Minister Netanyahu believes the US will join Israel’s war against Iran ‘within days’.”
According to Polymarket, there is a 76% chance of US military action against Iran before July, up from 38% on June 16 but down from today’s peak of 90%.
Risk aversion also impacted the US markets, with the Nasdaq Composite Index falling 0.91% on June 17.
US BTC-Spot ETF Snaps Outflow Streak
Fears of US involvement in the Israel-Iran conflict also sank demand for US BTC-spot ETFs. According to Farside Investors, key flows for June 17 included:
Fidelity Wise Origin Bitcoin Fund (FBTC) had net outflows of $208.5 million.
ARK 21Shares Bitcoin ETF (ARKB) reported net outflows of $191.4 million.
Bitwise Bitcoin ETF (BITB) saw net outflows of $22.8 million.
Excluding pending flow data for BlackRock’s (BLK) iShares Bitcoin Trust (IBIT), BTC-spot ETF issuers saw total net outflows of $422.7 million, potentially ending a six-session inflow streak. Despite Tuesday’s potential outflows, the US BTC-spot ETF market has reported $1,227.9 million of net inflows in June, cushioning BTC’s downside.
Despite Farside reporting June 17 outflows, Santiment noted that ETF inflows since June 9 remain robust overall, stating:
“Even with Bitcoin slipping below $104K Tuesday, Bitcoin ETFs remain strong. Working on a 5-day net inflow streak, there has been a total of just over $1.464B in money moving into BTC’s ETFs, dating back to June 9th.”
BTC Price Outlook: Geopolitical Risks and ETF Flows
BTC fell 2.14% on June 17, reversing Monday’s 1.18% gain, closing at $104,518. The near-term price trajectory depends on Israel-Iran war-related news, legislative headlines, the FOMC’s economic projections (June 18), and ETF flows.
Potential scenarios:
Bearish Scenario: US involvement in the Israel-Iran conflict, legislation setbacks, hawkish Fed signals, and ETF outflows. A combination of these could send BTC below the 50-day Exponential Moving Average (EMA), bringing $100,000 into play.
Bullish Scenario: Progress toward an Iran-Israel ceasefire, bipartisan support for crypto bills, dovish Fed cues, and ETF inflows. Under these scenarios, BTC could retarget its all-time high of $111,917.
