Collective decline in Bitcoin and risky assets as Trump’s deadline approaches

SadaNews - The price of Bitcoin fell in Asia on Tuesday, as cryptocurrencies were affected by broader market volatility with the approaching deadline set by President Donald Trump for Iran.

The largest cryptocurrency dropped by 2.2%, trading around $68,800 at 1:15 PM Singapore time. The decline wiped out gains from yesterday, when the price briefly exceeded $70,000 for the first time since March. Other cryptocurrencies also declined, with Ethereum, the second-largest cryptocurrency, falling by 2.8%.

Global stocks fluctuated ahead of the deadline set by Trump on Tuesday, who threatened to bomb Iran's civilian infrastructure unless the Strait of Hormuz was reopened. Futures contracts for the S&P 500 index declined by 0.4%.

Outlook for continued bearish sentiment towards Bitcoin

Rachel Lucas, an analyst at BTC Markets, said: "The overall outlook for Bitcoin remains bearish in the short to medium term."

She added that the market is in a state of "watching and waiting," as "bullish bettors lack sufficient conviction to sustain a breakout above the resistance level, while bearish bettors fail to enforce a decisive break below support levels."

The risks of escalation in the war with Iran have largely kept investors on the sidelines, following reports that Tehran rejected a ceasefire proposal. Trump stated that reopening the strait, which is a vital trade route, would be part of any agreement to end the war.

Surge in global energy prices

Since the outbreak of the war, oil prices have surged sharply. Brent crude rose on Tuesday, adding about 50% to its gains since the conflict erupted in late February. Gold prices remained stable during the day, down more than 10% since the war began.

Bitcoin has shown relative resilience, with indications of reduced selling pressure from institutions.

Bitcoin exchange-traded funds registered in the United States attracted inflows of $471.3 million on Monday, adding to $22.3 million in inflows last week.

Sideways price range for Bitcoin

The price of Bitcoin has ranged between $65,000 and $75,000 since the beginning of March. Following a sharp sell-off in October, cryptocurrency trading has been weak. Traders are now monitoring the end of the war and new cryptocurrency legislation in the United States as potential factors to drive digital assets upward.

Lucas said: "The bullish scenario depends on two catalysts: a confirmed and sustainable ceasefire between the United States and Iran that brings oil prices back below $100, and the expected passage of the American clarity law by late April, which market participants are closely watching as a regulatory catalyst that could open the door to new investment activity."