Wall Street is shifting its focus from Federal Reserve rate cuts to potential hikes, with Bloomberg pricing showing over 60% odds of a hike by October and CME FedWatch indicating 40% year-end hike odds. The probability of an April rate cut has dropped to 0%. This shift is largely driven by surging oil prices, with Brent crude exceeding $109, fueling inflation fears. As a result, risk assets are seeing capital outflow, with global equity funds shedding $20.3 billion. Bitcoin is facing a challenging macro environment, hovering below $70,000 and falling alongside other assets like QQQ and GLD. The scenario of sticky inflation without a recession, with oil in the $80-$100 range, is identified as potentially the "most hostile macro environment of all" for Bitcoin, as tighter financial conditions outweigh its safe-haven appeal.

Wall Street is shifting its focus from Federal Reserve rate cuts to potential hikes, with Bloomberg pricing showing over 60% odds of a hike by October and CME FedWatch indicating 40% year-end hike odds. The probability of an April rate cut has dropped to 0%. This shift is largely driven by surging oil prices, with Brent crude exceeding $109, fueling inflation fears. As a result, risk assets are seeing capital outflow, with global equity funds shedding $20.3 billion. Bitcoin is facing a challenging macro environment, hovering below $70,000 and falling alongside other assets like QQQ and GLD. The scenario of sticky inflation without a recession, with oil in the $80-$100 range, is identified as potentially the "most hostile macro environment of all" for Bitcoin, as tighter financial conditions outweigh its safe-haven appeal.