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Bitcoin surpassed $73,000, reaching its highest value in recent weeks, driven by increasing resilience in the cryptocurrency markets and strong capital inflows into US spot Bitcoin ETFs.
Despite geopolitical tensions in the Middle East, optimism in the market has increased demand for digital assets.
According to market data, Bitcoin rose approximately 8% during the day, climbing above $73,000 and reaching its highest level in about a month. Ethereum, the second-largest cryptocurrency, also surged by up to 9%, climbing above $2,100.
Globally, stocks rose while oil prices showed a more balanced picture. Signals that the conflict in Iran may be shorter than expected supported investor sentiment. Bitcoin had fallen to around $63,000 on Saturday following the US and Israeli attacks on Iran. However, according to Bloomberg data, US spot Bitcoin ETFs recorded net inflows of more than $680 million in the last two days.
Julio Moreno, Head of Research at CryptoQuant, stated that the rise in Bitcoin was supported by increased demand in the derivatives markets. Moreno said, “The Bitcoin price had been consolidating for about a month. With the recent rise, open positions increased rapidly, indicating that investors are opening new long positions.”
Despite this, the crypto markets remain cautious. Bitcoin is trading approximately 40% below its October peak. This environment, following a prolonged sell-off, positions Bitcoin differently amidst geopolitical uncertainties.
Cryptocurrency advocates have long described Bitcoin as digital gold, arguing that it can serve as a safe haven during times of crisis. However, this narrative has weakened in recent months, with Bitcoin experiencing a decline while gold has rallied strongly. In contrast, the picture has begun to change in recent days. Since the Friday before the start of the Iran tensions, Bitcoin has risen by approximately 10%, while gold has fallen by about 2% during the same period.
Frank Chaparro, GSR’s head of content and special projects, said that investor capital may be redirecting to crypto assets. Chaparro stated, “Gold doubled in value while Bitcoin halved. Given factors like geopolitical tensions, sanctions, wars, and rising budget deficits, Bitcoin seemed to be lagging behind other assets. This kind of positioning can quickly reverse when market sentiment changes.”
On the other hand, market volatility and ongoing military conflicts raise questions about whether the rally will be sustainable. As the conflict enters its fifth day, Israel and Iran continue their exchange of airstrikes and missile attacks. Hundreds of people have reportedly died in Iran, with dozens more casualties in other parts of the region. The US has announced the deaths of six of its soldiers.
FxPro Chief Market Analyst Alex Kuptsikevich noted that current conditions are still fragile, stating, “It’s too early to say the bottom has been reached. As volatility in stock indices increases, institutional investors are reducing their leverage, which could leave Bitcoin vulnerable.”
In the cryptocurrency derivatives markets, a total of $511 million worth of positions were liquidated in the last 24 hours. Approximately $408.7 million of these liquidations were from short positions, and $102.3 million were from long positions.
*This is not investment advice.