Bitcoin saw a slight dip early Thursday in Asia as oil prices jumped back above $100 a barrel. This happened because worries about the conflict involving Iran grew deeper.
The biggest cryptocurrency dropped as much as 2% after news of attacks on two oil tankers in Iraqi waters. It hovered around $69,600 by 12:15 p.m. in Singapore. At the same time, Brent crude oil shot up by as much as 10.5%. This made investors shy away from risky assets, affecting stock markets too.
Bitcoin has been fairly steady compared to other investments since the U.S. and Israel started bombing Iran on February 28. The digital currency was one of the first to fall that weekend when other markets were closed, but it quickly bounced back. Recently, it even climbed above $73,000 as investors looked for safe, easily sellable assets.
Rachael Lucas, an analyst at BTC Markets, mentioned, “We would expect some profit-taking at the $70,000 level.” She added that the overall market remains shaky, with unpredictable oil prices and ongoing worries about global conflicts making investors cautious for now.
Markets have been swinging wildly because of mixed messages about the Middle East conflict. U.S. President Donald Trump hinted this week that the war might end soon, but no clear timeline exists. Meanwhile, Iran continues to launch attacks in the region and interfere with shipping through the Strait of Hormuz, a crucial trade route.
Concerns about higher energy prices have pushed traders to buy the dollar. Bitcoin has also acted as a safe haven, as traders sought assets they could quickly buy and sell depending on market conditions.
Andreja Cobeljic, head of derivatives trading at Amina Bank, wrote on Wednesday that signs suggest Bitcoin could continue to gain value soon. He pointed to “negative funding rates” – payments on ongoing contracts that don’t expire – which for Bitcoin hit their lowest point in almost five weeks on Thursday. He also noted that big Bitcoin holders, often called “whales,” were buying when prices dipped.
Cobeljic explained, “Negative average monthly funding rates have happened only 10 times since 2018, and has historically preceded strong forward returns over longer horizons.” He added that “whale accumulation has been observed consistently in the low $60,000 range.” Combining these factors, he believes the short-term outlook for a price recovery is more positive than the news might suggest.
