(April 7): Bitcoin slipped on Tuesday, as cryptocurrencies were caught up in the broader market volatility ahead of US President Donald Trump’s deadline for Iran.
The largest cryptocurrency fell as much as 2.2% before paring some losses, changing hands at around US$69,169 (RM279,131.50) in early morning trading in New York. The decline erased gains from the previous day, when Bitcoin briefly topped US$70,000 for the first time since March.
Other digital assets also fell. Ether, the second-largest token, lost as much as 2.8% to hit US$2,088 before recovering to trade around US$2,126.
Global equities fluctuated ahead of a Tuesday deadline set by Trump, who threatened to bomb civilian infrastructure in Iran unless the Strait of Hormuz was opened. S&P 500 futures were largely flat.
Bitcoin sentiment “remains bearish on the short-to-medium time frame,” said Rachael Lucas, an analyst at BTC Markets. The market is in wait-and-see mode, she added, with “bulls lacking sufficient conviction to sustain breakouts and bears unable to force a decisive breakdown".
See also: Bitcoin jumps to three-week high on US-Iran ceasefire plan
Escalation risks in the war with Iran have largely kept investors on the sidelines after it was reported that Iran had rejected a ceasefire proposal. Trump said that opening the strait, a critical trade waterway, would be part of any deal to end the war.
Since the war started, oil prices have surged. Brent crude has made gains of roughly 50% from the start of the conflict at the end of February, while gold is down more than 10%.
Bitcoin has been comparatively resilient, with signs that institutional selling pressure is easing. US-listed spot Bitcoin exchange-traded funds saw US$471.3 million in net inflows on Monday, adding to the US$22.3 million in inflows last week.
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“Cryptocurrencies remain in suspended animation, moving sideways over the last month,” said Chris Beauchamp, chief market analyst at investing and trading platform IG. “While equities seem content to ignore the looming energy crisis, at least until they do decide to focus on it, and oil prices continue to climb thanks to the ongoing Straits closure, cryptocurrencies seem to be just left to drift.”
Bitcoin has largely been stuck between US$65,000 and US$75,000 since the beginning of March. Since a sharp selloff in October, crypto trading has been weak. Now traders have eyes on an end to the war and new crypto legislation in the US as potentially pushing digital assets higher.
“The bull scenario hinges on two catalysts: A confirmed and sustained US-Iran ceasefire that brings oil below US$100 and passage of the US Clarity Act, expected in late April, which institutional market participants are closely watching as a regulatory unlock,” Lucas said.
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