Bitcoin soared above $70,000 on Wednesday after news that the United States and Iran had agreed to a two-week ceasefire brokered by Pakistan to reopen the Strait of Hormuz.
According to crypto slate According to the data, the top cryptocurrency rose 5% to a peak of $72,734 before falling back to $71,477 at the time of writing.
Data from CryptoQuant shows that within two hours of the news, top cryptocurrencies recorded a taker buying volume of around $3 billion on Binance’s derivatives market, showing how quickly investors changed their positions in hopes that the situation would continue to develop positively.
Meanwhile, the ceasefire announcement also helped trigger widespread bailouts across global markets. Brent crude oil fell 13.8% to $94.25 and US crude oil fell 15.4% to $95.52, while Germany’s DAX rose 4.7%, Japan’s Nikkei 225 rose 5.4% and South Korea’s Kospi rose 6.9%.
But Bitcoin’s recent return above $70,000 is not the first time the flagship digital asset has crossed that threshold following a new peace deal in the US-Iran war.
Maksim Sakharov, co-founder and group CEO of WeFi, said: crypto slate:
“Whenever there are geopolitical, macro, or even institutional or micro tensions, weak investors and traders are always shaken out. News of a ceasefire has partially dissipated fears, but sustaining the $70,000 level will require more than just a ceasefire.”
As a result, the question arises whether the current rally can be sustained or whether BTC will fall again.
Oil is still the first link in the chain
The Strait of Hormuz remains central to the calculation of whether BTC can sustain its current rally.
About 20% of the world’s oil exports pass through waterways, and disruptions to them pose a direct threat to energy prices, transportation costs, and inflation expectations.
During the latest escalation, traffic was disrupted and some 130 million barrels of crude oil and 46 million barrels of refined fuel were stranded on some 200 tankers in the Gulf, the report said.
As a result, Brent crude oil has soared 55% since February 28, and before the ceasefire was announced, oil prices were near $150 a barrel in some spot oil markets.
This may help explain why the market reaction was so sharp after the ceasefire was reported. Low oil prices do more than just reduce one source of headline risk. It also alleviates one of the most pressing threats to the global macro outlook. This means that a prolonged energy shock could reignite inflation just as central banks are looking for room to ease policy.
Notably, Chicago Fed President Austan Goolsby has warned that the war is causing a stagflation shock, while a Dallas Fed study suggests that if the Hormuz turmoil continues, U.S. headline inflation could exceed 4% by the end of the year.
But with the new peace deal, Josh Gilbert, market analyst at eToro, said: crypto slate He argued that the drop in oil prices shows that the market has begun to price in the reopening of the Port of Hormuz.
He said this drop in oil prices was broadly supportive for global markets as it eased pressure on consumers, eased inflation expectations and removed one of the headwinds that had weighed on stocks in recent weeks.
For Bitcoin, that change is extremely important. Amid soaring oil prices and growing fears of war, major assets did not rise in value. But it fluctuated as oil prices fell, stock prices rose and investors began pricing in less severe inflation shocks.
Prices exceed $70,000, but support is uneven
Bitcoin’s recent move above the $70,000 threshold was noteworthy, but trading patterns showed that confidence remains limited.
Earlier this month, Glassnode explained that Bitcoin is stuck in the $60,000-$70,000 range, with around 8.4 million BTC still underwater and a large cluster of supply between $80,000 and $126,000 above the market.
This creates two constraints at the same time. First, it means that many holders are still looking for higher prices to cut their losses or exit. Second, any move above $70,000 means you are still faced with a significant supply of overhead costs before developing into something more sustainable.
Apart from that, institutional interest in top cryptocurrencies remains uneven as digital assets continue to record significant inflows and outflows.
U.S. spot exchange-traded fund data compiled by SosoValue has shown sharp fluctuations over the past few weeks, with nine funds recording outflows of $173.7 million on April 1st, followed by inflows of $471.4 million on April 6th, and again on April 7th.
These numbers show that the top cryptocurrencies still do not have strong institutional support. This is because a market that can sustain above $70,000 for several weeks typically exhibits a more stable pattern of spot demand than a market that can alternate between large inflows and large outflows over several sessions.
Further, the derivatives data also suggests that traders are not treating this move as a confirmed breakout.
Greeks.live said Bitcoin’s rally towards $72,000 has improved sentiment primarily by alleviating fears of a black swan crash, rather than creating hopes for a sustained rally.
The firm noted that while the implied volatility of BTC major expiration options continues to decline, the implied volatility near expiration has also declined.
Further, while negative distortions eased as prices rose, the broader message from options positions was that traders were allaying fears of an immediate collapse and were becoming less confident that the bull market would continue.
What’s next for Bitcoin?
For Bitcoin to remain above $70,000 over the next 2-6 weeks, Ceasefire will have to do more than survive the initial headline cycle. Tanker traffic through Hormuz will need to normalize.
Oil prices will need to stay near or above $109, below the recent panic zone. Inflation concerns will need to ease, not accelerate again. ETF flows should remain balanced and positive, rather than one day of highs and one day of withdrawals.
If that happens, there is a clear path for Bitcoin to trade in the $70,000 to $78,000 range, with room for it to move towards the low $80,000 range if spot demand strengthens and derivatives positioning does not become defensive.
Andre Dragos, head of European research at Bitwise, said a sustained rise above $80,000 increases the likelihood that the market will shift from bearish to bullish sentiment, as several key valuation and cost-based metrics converge around that level.
However, if the ceasefire breaks down, transportation disruptions return, and oil rebounds, the token could return to the $62,000 to $69,000 range that defined the market before this week’s move.
(Tag translation) Bitcoin
