Bitcoin Faces Pressure Amid Rising Oil Prices
Bitcoin slipped in Asian markets early Thursday as oil prices surged past $100 a barrel, raising concerns about the ongoing conflict in Iran.
The yuan-denominated cryptocurrency dropped up to 2% following attacks on two oil tankers in Iraqi waters, settling around $69,600 by 12:15 p.m. in Singapore. Brent crude oil experienced a significant jump of up to 10.5%, contributing to a cautious mood across various markets, including stocks.
Since the bombing campaign initiated by the US and Israel against Iran on February 28th, Bitcoin has managed to remain relatively stable compared to other assets. While it was one of the first to decline as markets closed over the weekend, it quickly bounced back. Recently, Bitcoin has even surged past $73,000, as investors have been drawn to its liquidity.
Rachel Lucas, an analyst at BTC Markets, noted, “We expect some profit-taking at the $70,000 mark. The macroeconomic environment is quite volatile, with fluctuations in oil and ongoing geopolitical tensions creating a cautious risk sentiment in the short term.”
Markets seem to be grappling with mixed signals about the situation in the Middle East. President Donald Trump hinted this week that the conflict could come to a close soon, though an exact timeline remains uncertain. Meanwhile, Iran continues its attacks in the region, affecting traffic in the vital Strait of Hormuz.
As fears rise over the implications of escalating energy prices, traders are increasingly seeking refuge in the dollar. Bitcoin has also been viewed as a potential hedge, offering enough liquidity for traders to react quickly to changing market conditions.
Andreja Koberjić, head of derivatives trading at Amina Bank, mentioned in a note Wednesday that the current situation could suggest that Bitcoin’s upward trend might persist in the short term. He pointed out the negative funding rates associated with perpetual futures contracts, which have recently pushed Bitcoin to its lowest level in almost five weeks. Interestingly, large holders, referred to as “whales,” are reportedly purchasing more Bitcoin as prices dip.
Koberjić stated, “Since 2018, the average monthly funding rate has been negative only 10 times, and historically, this has preceded extended periods of high returns. Whale accumulation has typically been seen in the low $60,000 range. Overall, the preparations for a potential relief rally seem more promising than the general situation might suggest.”
