Bitcoin’s push past $73,000 quickly lost steam as the market shifted focus back to a shaky truce between the U.S. and Iran.
Summary
- Bitcoin failed to hold above $73,000 as Iran tensions and weak US data weighed on sentiment.
- Oil near $97 and a 0.4% rise in core PCE added pressure on risk assets.
While a brief rally took place after rumors surfaced that Iran might accept Bitcoin as payment for cargo ships moving through the Strait of Hormuz, the excitement faded. Investors are now worried that geopolitical friction could undo the progress Bitcoin has made in the U.S. market recently.
Tensions flared when Iranian parliamentary speaker and former IRGC general Mohammad Bagher Ghalibaf criticized the ongoing military actions in Lebanon.
Ghalibaf, a key figure in the regime, warned that any “illegal entry” or “denial of uranium enrichment” would be seen as a move to “violate the ceasefire” and could trigger a larger conflict.
This instability pushed crude oil prices back up to $97 per barrel. Rising energy costs typically pull money away from speculative assets like crypto as investors become more cautious about risk.
However, the pressure isn’t just coming from overseas; data from the U.S. Bureau of Economic Analysis showed that the core PCE index rose by 0.4% on Thursday. This suggests that inflation is stickier than expected, making it harder for the Federal Reserve to pivot.
Economic growth is also slowing down significantly. The fourth quarter GDP was revised down to a tiny 0.5% annualized rate, signaling that the economy is almost at a standstill.
Usually, signs of stagnation lead traders to expect the government to step in with more liquidity, but this time, the data has sparked genuine fear. A lack of faith in the plan to avoid a recession has already softened the U.S. dollar against a basket of other major currencies.
Will Bitcoin price go up?
Currently, Bitcoin is stuck in an awkward spot between these two narratives. It is trying to find a clear path while being pulled by war headlines on one side and a possible economic crash on the other. This lack of direction is visible on the charts, as the price struggles to stay above $72,000.
For the rally to continue, Bitcoin needs to chew through a massive wall of selling pressure. There are roughly $6 billion in leveraged short positions sitting between $72,200 and $73,500. Even though yesterday’s rally cleared $427 million in these bets, the remaining sell orders are acting as a heavy lid on the price.
Bitcoin needs to firmly break $73,000 and turn that level into support before it can chase new highs. If it fails to clear this liquidity soon, traders may lose heart and start taking profits, which could easily send the price sliding back toward $68,000.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
