In brief
- Bitcoin surged to $74,157 on Monday as the U.S.-Iran conflict heightened geopolitical uncertainty.
- The exhaustion of selling pressure, conviction from long-term holders, and institutional inflows have helped Bitcoin’s recovery rally.
- Options data indicates that a breakout above $75,000 could accelerate Bitcoin’s recovery, according to Glassnode.
Bitcoin surged higher over the weekend as the conflict in the Middle East entered its third week, with the cryptocurrency’s bullish momentum carrying over into Monday.
The leading crypto hit $74,157 in the early Asian trading session Monday morning, according to data from price aggregator CoinGecko. At time of publication, Bitcoin is trading at around $73,978, up 3.1% on the day and 9.1% on the week.
Bitcoin’s rise comes in spite of escalating geopolitical tensions due to the U.S.-Iran war, which has sparked turmoil across markets.
It would be “very bad for the future of NATO,” if allies do not help secure the Strait of Hormuz, U.S. President Donald Trump said in an interview with the Financial Times, following a Sunday post on TruthSocial calling on countries that receive Oil through the Hormuz Strait to “take care of that passage,” and adding that the U.S. would help “A LOT!”
Due to the uncertainty, crude oil has been on a slow yet steady ascent and is trading at $99.25 per barrel, up nearly 28% from the March 9 low, but still well below last week’s $119.48 high.
Gold, a safe-haven asset that typically surges amid geopolitical uncertainty, is down roughly 7% since the conflict began on February 28. Bitcoin, which behaved as a risk-on asset for most of the last five months, has notched 11% in gains, widening the gap between the two.
Bitcoin’s ascent is not due to the war itself, but rather to its macroeconomic consequences, Tim Sun, a senior researcher at crypto operator HashKey Group, told Decrypt. “The combination of high oil prices, weak growth, and deficit expansion means that future U.S. fiscal pressure will only increase, eventually funneling back into liquidity issues.”
Additionally, Sun pointed to the exhaustion of selling pressure from “short-term emotional speculators,” leaving the market in the “hands of medium-to-long-term holders.”
“Bitcoin Days Destroyed—a measure of how much long-dormant Bitcoin is being moved—fell to its lowest level in nearly three years, meaning the people with the deepest conviction simply sat on their coins,” Illia Otychenko, Lead Analyst at CEX.IO, told Decrypt.
Otychenko echoed Sun’s outlook, explaining that the geopolitical noise may have reinforced the long-term holders’ patience in uncertain environments.
Short-term seller exhaustion and long-term holders’ conviction, coupled with the stabilization of exchange-traded fund inflows over three consecutive weeks, has helped shape Bitcoin’s recovery rally, experts told Decrypt.
Options data support the potential upside.
A large pocket of “negative gamma” sits near the $75,000 strike, a Monday Telegram post by market intelligence firm Glassnode highlighted. That “tripwire level” has a massive concentration of call options held by institutional market makers who lose money if the price climbs past that point.
This means market makers who sold call options at that level may be forced to buy Bitcoin as the price approaches, amplifying upside moves.
Users on prediction market Myriad, owned by Decrypt’s parent company Dastan, remain optimistic, assigning a 55% chance that crypto markets will rally this spring.
Despite Bitcoin functioning as a sovereign, globally liquid asset, held independently of traditional financial intermediaries, in extreme scenarios, the “structure of this rally isn’t entirely healthy,” Sun said, tempering his outlook.
As the Middle East conflict extends, the leading crypto is likely to behave in this manner due to the need for an alternative, cross-border asset that can function outside the traditional financial system.
That said, experts highlighted that investors need to pay close attention to March’s FOMC meeting and the U.S. Federal Reserve’s stance on the current state of the macroeconomic outlook.
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Source: https://decrypt.co/361208/bitcoin-hits-74k-as-u-s-iran-war-enters-third-week-heres-why
