Hassan Maishera
TL;DR
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BTC is up by less than 1% and is currently trading below $68,000.
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Crude oil’s price has spiked above $115 amid the ongoing crisis in the Middle East.
Crude Oil Price Spike Affects the Financial Markets
The cryptocurrency market experienced a sharp rally last week, but has given up most of the gains over the past few days.
Bitcoin rallied to the $73,000 region on Thursday but has since lost most of its value. At press time, BTC is trading at $67,153, up by less than 1% in the last 24 hours. This is a 10% slide from the recent peak of $73,500 recorded on March 5.
The bearish performance over the past few days comes amid the ongoing crisis in the Middle East. Oil prices hit a high of $115 during the Asian equity market on Monday, resulting in Bitcoin and major stocks recording losses.
The pullback meant that Bitcoin is back to levels seen before the short-lived surge. This aligned with CryptoQuant's previous analysis that last week's price action was more of a "relief rally" than the start of a new bull cycle.
While speaking to The Block, Dominick John, analyst at Zeus Research, stated that,
"BTC’s move to $66K is driven by a macro-driven pullback. Elevated geopolitical risk, particularly the lack of de-escalation in the Middle East, pushed markets into a more risk-off posture, while rising oil prices are adding to inflation concerns and tightening global financial conditions."
The Middle East crisis has been the cause of the price of crude oil surging to $115 per barrel, up 25% today, and 75% in the past month.
According to U.S. President Donald Trump, the short-term surge in oil prices is "a very small price to pay," adding that prices would stabilize once "the destruction of the Iran nuclear threat is over."
Jeff Mei, COO at BTSE, pointed out that the rising price of oil is a major factor in driving up inflation and could drag down global economic growth, given that it is used as an input for so many products across different industries.
The analyst added that this concern is what is causing Bitcoin to dip.
“That being said, bitcoin's price has proven to be more resilient than in past bear markets, and this could be because of the larger makeup of institutional holders this time around," Mei concluded.
Traders would now be keeping a close eye on Bitcoin ETF flows when the U.S. market opens in a few hours. If the flow turns positive, Bitcoin’s price could rally higher.
However, the funds saw $576.6 million in net outflows last Thursday and Friday combined. A persistent outflow today could see BTC retest lower levels around the $65k region.
