Bitcoin The next big move might have less to do with crypto fundamentals and more to do with the direction of oil prices.
The top cryptocurrency by market value rebounded to $70,900 from early-week lows near $67,000, according to CoinDesk market data, following a broader risk-off trend after the United States and Iran agreed to a two-week ceasefire late Tuesday, sending oil prices down about 15% to less than $100 a day. barrel.
Bitcoin has been here before – prices have climbed above the $70,000 mark several times in recent weeks, only to have the rallies quickly fizzle out, highlighting the lack of sustained bullish momentum.
Will it be different this time? According to analysts at cryptocurrency exchange Bitfinex, much of this depends on whether oil prices continue to be weak.
“A 15-16 percent collapse in crude, if sustained, significantly advances the potential reduction window. Futures markets will likely reassess the likelihood of further rate reduction for late 2026, providing a structural tailwind for non-yielding risk assets, including bitcoin,” the analysts said in a market update.
A sustained decline in oil prices could ripple through the global economy, partially easing the inflationary shock triggered by March’s inflation surge and giving the Federal Reserve and other major central banks more room to cut rates later this year.
If that happens, bitcoin could rally back to $80,000, with gains driven by the unwinding of short positions.
“Bitcoin sits at $72,000, crowding into a massive pool of short liquidity. Derivatives heatmaps show about $6 billion of leveraged shorts concentrated between $72,200 and $73,500, with peak density around $72,500. If spot demand can force the price through this zone, the resulting liquidation cascade would likely catapult Bitcoin through bid gap towards $80,000,” Adam Saville Brown, sales manager at Tesseract. Group, said in an email.
However, for now, expectations for rate cuts remain muted. Some analysts say the recent rise in energy costs risks keeping inflation high without significantly hurting demand, which could lock the Fed into a prolonged holding pattern in which rates remain at 3.5%, with no hikes or cuts on the table.
The ceasefire between Iran and the United States already appears to be broken, according to media reports. Tensions flared after Israel launched intense strikes in Lebanon, claiming the territory was not covered by the deal – a claim that contradicted the supposed mediator, Pakistan. In a further escalation, an Iranian news agency reported that oil traffic through the Strait of Hormuz had again been halted, just hours after the first tankers were allowed to pass, citing the resumption of hostilities.
This means oil could rebound again, triggering risk aversion if the warring parties fail to reach an agreement in the coming days.
“The bear case is simpler: If negotiations fail, oil goes back above $100 and we return to where we were ten days ago. The two-week window creates a binary setup in which derivatives markets will price aggressively,” Brown said.
Bitfinex analysts said oil could hit $120 if the Strait of Hormuz remains closed, reducing prospects for a Fed rate cut.
“This creates a known binary event in approximately 13 days. Risk-exposed participants work within a two-week time frame. The oil movement has been priced; a collapse of the ceasefire would be increasingly damaging than the initial shock,” the analysts noted.
