Bitcoin rebounded after U.S. June inflation data came in below expectations, but it has failed to form a clear direction due to the burden of military clashes in the Middle East and rising oil prices.

On July 19 (local time), blockchain media outlet CoinPost reported that bitcoin started last week weakly as the resumption of military clashes between the United States and Iran also weighed on U.S. stocks over the weekend. It said declines deepened after hawkish comments from Federal Reserve Governor Christopher Waller. Losses were partly capped after U.S. President Donald Trump said a peace deal with Iran was possible.

The trigger for the rebound was U.S. inflation data. As both the June Consumer Price Index (CPI) and Producer Price Index (PPI), released between July 14 and 15, came in below market expectations, bitcoin erased earlier losses and at one point rose into the $65,000 range. Yuya, an analyst at Bitbank, pointed out that the June U.S. CPI and PPI were lower than expected, showing easing inflation pressure.

But the rise did not continue. With the United States and Iran continuing to clash, bitcoin's upside was limited as oil prices rose. Hasegawa mentioned that West Texas Intermediate (WTI) crude futures were testing the $80-a-barrel level. If oil prices rise further, the recently weakened outlook for Federal Reserve rate hikes could strengthen again, he explained, which could be a headwind for bitcoin.

A pullback in technology stocks was also cited as a burden. On July 16, bitcoin slid into the $64,000 range as profit-taking emerged in the tech sector even after TSMC reported strong results. Selling in Asian technology stocks also spread to the U.S. market.

But weakness in tech shares itself was not interpreted as a signal of poor earnings. TSMC's net profit for April to June rose 77 percent from a year earlier. "Earnings themselves were very strong," Hasegawa said, adding that the move was largely profit-taking driven by expectations having been priced in. As a result, markets are increasingly focused on whether the resilience of corporate profits will be confirmed again after the earnings season gets into full swing, as a factor that could sway risk-asset sentiment broadly.

This week, major technology companies including Tesla, Alphabet and Intel are scheduled to report earnings. If broad profit-taking subsides and the staying power of corporate earnings is confirmed, forecasts suggest a favorable environment could form for bitcoin as well. Hasegawa said that if corporate earnings strength is reaffirmed, bitcoin could benefit from improving risk-asset sentiment overall.

Regulatory issues are also a point of focus for the market. The U.S. Senate is set to begin coordinating schedules next week for a plenary vote on the Clarity bill. If a specific voting date is presented, it is highly likely to be received positively by the cryptocurrency market.

Ultimately, analysts say the near-term direction depends on oil prices and technology stocks. If Middle East conditions worsen again and oil prices rise further, the burden on bitcoin could grow. If oil price gains ease and profit-taking in tech stocks also cools, bitcoin may have room to extend its rebound trend.