Middle East tensions, Fed patience, and Ethereum ETF inflows shape volatile crypto sentiment.

Geopolitical tensions in the Middle East, including a missile strike in the Strait of Hormuz, have increased energy risk premiums, impacting crypto markets through inflation and uncertainty. The Federal Reserve signaled a likely hold on interest rates amid resilient U.S. labor data, reducing expectations for near-term rate cuts, which affects crypto liquidity. Ethereum saw mixed signals with large exchange deposits suggesting potential selling pressure, while spot Ethereum ETFs recorded continued inflows, indicating sustained institutional demand. Additionally, a $5.87 million exploit on the Ethereum network raised security concerns, even as corporate adoption and tokenized asset pilots suggest long-term growth potential. Market direction remains sensitive to geopolitical and policy headlines.