[DigitalToday reporter Yoonseo Lee] Bitcoin is moving sideways around the $66,000 level ahead of instability in Middle East developments and the U.S. Federal Open Market Committee (FOMC) meeting.

On July 23 (local time), blockchain media outlet CoinPost reported that the market is reacting sensitively to risk-off flows tied to renewed military clashes between the United States and Iran.

A provisional agreement emerged on June 17 to resume navigation through the Strait of Hormuz, but the ceasefire has effectively collapsed as attacks on ships passing through the strait continued after late June. The United States resumed air strikes in July, extending to an 11th straight day as of July 22. Houthi forces linked to Iran have declared a maritime embargo against Saudi Arabia.

International oil prices have also jumped again. Brent crude futures rose 4 percent on July 22 to the $94 a barrel range and gained about 20 percent on a monthly basis. U.S. gasoline prices have returned to around $4 a gallon, and some in the market are discussing the possibility that crude could top $100. Higher oil prices are raising concerns about rekindled inflation and are acting as a factor pressuring investor sentiment across risk assets, including cryptocurrencies.

On the Bitcoin chart, $60,000 is seen as a short-term floor and $80,000 as the ceiling. Bitcoin recently rebounded near $60,000 and climbed into the upper $60,000s, but resistance remains clear.

Market analyst Dan Crypto Trades sees Bitcoin trying to rebound within a wide $60,000 to $80,000 range. He said the 200-day simple moving average and the 200-day exponential moving average on the daily chart are falling rapidly, and mentioned that even if the current level holds, they are likely to meet the price around August.

The immediate resistance levels the market is watching are $67,000, the June peak, and the area near $70,000 where a bull-market support band based on weekly closes overlaps. The 200-day simple moving average on the daily chart is about $72,700 and the 200-day exponential moving average is about $73,900, both above the current price. On a weekly basis, about $57,900, the 0.382 retracement area, and about $63,300, the 200-week moving average, overlap as a lower support zone. A view was also presented that the market needs to clearly regain $71,000, the half retracement level, to gauge whether a bullish turn is under way.

Institutional flows are also still hard to view as a clear recovery. Spot Bitcoin exchange-traded funds (ETFs) recorded net outflows of about $4.5 billion in June, and outflows totaling $8.2 billion over eight straight weeks only ended in early July. After that, about $197 million flowed in during the week through July 10 and about $75.7 million during the week through July 17, marking two consecutive weeks of net inflows. Even so, inflows over the two weeks totaled only about $273 million, and on July 13 about $420 million flowed out in a single day amid renewed Middle East tensions.

The Fear and Greed Index, a gauge of market sentiment, stands at 33, remaining in the "fear" zone. Bitcoin is down about 20 percent since May. Another burden cited is that funds are concentrating on artificial intelligence (AI) semiconductor stocks and the initial public offering (IPO) market, leaving cryptocurrencies relatively behind.

Macro factors are also a burden. Ahead of the FOMC meeting on July 29, the market is increasingly taking a wait-and-see stance. Based on the CME FedWatch tool, the probability that the policy rate will be left unchanged at the July 29 meeting was priced at about 83 percent.

Still, concerns remain that a sharp rise in oil prices could again spur inflation. On July 13, when oil surged, the probability of a rate hike temporarily rose to the 46 percent range. Fed Governor Christopher Waller said the perceived policy risk has shifted toward inflation rather than labor market weakness, and Bank of America (BoA) forecast three rate hikes in 2026.

The U.S. June consumer price index (CPI) rose 3.5 percent from a year earlier, below the market forecast of 3.8 percent, briefly easing concerns about tightening. But whether the latest rise in oil prices will be reflected in the inflation indicators due to be released on Aug. 12 is expected to be the next turning point.

In the short term, the biggest variables are Middle East developments and the outcome of the July 29 FOMC meeting. The market is primarily viewing a box range between $60,000 and $68,000 as the most likely scenario. If oil tops $100 and the FOMC puts weight on tightening, pressure could grow to retest the $60,000 level. If oil prices retreat on diplomatic progress such as a renewed ceasefire agreement, there is also room for risk appetite to recover and for cryptocurrency fund flows to revive.