Bitcoin held above $71,000 Saturday morning, despite a U.S. Bombing raid on Kharg Island, Iran’s main crude export facility, and a warning from former President Trump regarding potential further strikes. The cryptocurrency, which reached $73,838 on Friday, experienced a sharp but contained reversal, falling back to around $71,000, a decrease of 0.7% over the past 24 hours.
The resilience of Bitcoin comes after two weeks of escalating conflict in the Middle East. Despite the intensifying war, the cryptocurrency is currently trading higher than its value at the conflict’s outset. Over the past week, Bitcoin has gained 4.2%, even as Ether rose 5.5% to $2,090, Dogecoin added 5%, Solana increased 4.2% to $88, and BNB climbed 4.5% to $655. All major cryptocurrencies have shown gains this week.
The market appears to be adapting to the ongoing conflict, with traders developing a framework for reacting to strikes and subsequent oil price spikes. This has diminished the reflexive sell-off impulse previously seen in response to geopolitical headlines. However, Bitcoin has repeatedly failed to break through the $73,000 to $74,000 resistance range, being rejected four times in the last two weeks.
Trump’s comments on Kharg Island introduced a new element of uncertainty. In a post on Truth Social Friday, he stated he refrained from targeting oil infrastructure “for reasons of decency” but would “immediately reconsider” if Iran continues to obstruct the Strait of Hormuz. Iran responded with a warning that any attack on its energy infrastructure would trigger retaliatory strikes against U.S.-linked facilities in the region, escalating the potential for further conflict.
Approximately $371 million in cryptocurrency positions were liquidated over the past 24 hours, reflecting the volatility of Friday’s trading. Short liquidations, totaling $207 million, exceeded long liquidations at $163 million, indicating an initial squeeze on bearish positions before the Kharg Island news triggered liquidations among those who had recently entered long positions.
Market attention is now focused on the Federal Reserve’s meeting scheduled for March 17-18. Rising oil prices, exceeding $100 a barrel, coupled with the largest energy supply disruption in history and the ongoing war, are intensifying concerns about stagflation. While CME FedWatch currently indicates a greater than 95% probability of the Fed holding interest rates steady at 3.5% to 3.75%, the Fed’s dot plot and Chair Powell’s press conference are expected to be closely scrutinized for any signals regarding a potential shift in monetary policy. Any indication of renewed rate hikes could negatively impact risk assets, including the cryptocurrency market, which has been anticipating interest rate cuts.
