Bitcoin continued its upward momentum above $71,000 on Tuesday as investors continued to weigh the impact on the market of President Donald Trump’s decision to halt a planned U.S. attack on Iran’s power and energy infrastructure for five days.
data from crypto slate showed that the top cryptocurrency was trading around $71,185 at the time of writing, up 4% during the session.
The price breached a level that traders had been eyeing as a test of whether institutional demand could continue to absorb war risks, rising energy prices and pressure from the Federal Reserve, which has signaled a slowdown in monetary easing.
The latest developments in the conflict first hit oil, then spilled over into currencies, stocks and digital assets.
Brent crude oil prices fell more than 13% after President Trump announced the pause, briefly falling to $96 a barrel before rebounding above $102 as traders reassessed the possibility of broader disruption and Iran backed off on the idea of direct talks.
But Bitcoin’s reaction caught attention as the digital asset avoided a significant drop in a week where oil, war and interest rate expectations all moved at the same time.
This price movement reinforced the market view that BTC is more closely tied to broader liquidity conditions and institutional positioning than in earlier cycles when retail flows were dominant.
Oil remains the main market channel
A central link between conflict and global markets runs through the Strait of Hormuz.
According to the International Energy Agency, approximately 25% of the world’s maritime oil trade and 20% of the world’s liquefied natural gas trade will pass through Hormuz in 2025. The US Energy Information Administration also says the route is one of the world’s most important energy chokepoints, with nearly a fifth of the world’s oil supplies passing through Hormuz.
As a result, traders will treat changes in the U.S.-Iranian conflict primarily as an oil market event. A sustained rise in oil prices could boost inflation expectations, delay central bank easing and tighten broader financial conditions.
In the case of Bitcoin, this order is increasingly important as exchange-traded products, large allocators, and macro funds account for a larger portion of trading activity.
On March 18th, the Federal Reserve kept its policy interest rate at 3.5% to 3.75%, further reinforcing this background. Policymakers forecast headline and core personal consumption expenditure inflation of 2.7% in 2026, and the median forecast for the federal funds rate at the end of 2026 remained unchanged at 3.4%.
These forecasts suggest that officials still expect inflation to decline gradually, with little room for a rapid easing cycle if energy prices continue to weigh on the outlook.
For Bitcoin, that means geopolitical stress is only part of the equation. If oil prices fall, inflation expectations ease, and expectations for interest rate cuts increase, the bull market is likely to expand further. If oil prices continue to rise, cryptocurrencies will have to contend with a tightening macro environment, even if military coverage does not worsen.
This dynamic helps explain the market reaction over the past few sessions. The suspension of a planned strike against Iran’s energy infrastructure prompted relief across global markets, but the rebound in oil prices above $100 a barrel showed how quickly sentiment can reverse as traders refocus on Hormuz and the risk of disrupted supply flows.
Fund flows reflect demand, and the Fed remains steered toward short-term fluctuations
Investment product data suggests that capital flows into Bitcoin continue even though the macro environment has become less supportive.
Asset management firm CoinShares reported more than $1.2 billion in inflows into digital asset investment products in the past two weeks, of which Bitcoin accounted for about $900 million.
The company also said that assets under management in digital asset products have increased by nearly 10% to more than $140 billion since the Iran crisis began.
The details in these reports give you a clearer picture of what’s driving price movements. CoinShares last week announced that it received $635 million in inflows from digital asset products in the first two days of the week, but that outflows increased to $405 million after the Fed’s March 18 decision.
This series of developments suggests that Bitcoin has withstood geopolitical stress while remaining highly sensitive to the direction of monetary policy. Investors continued to add exposure, but they also reacted quickly when the Fed indicated that capped rates could remain in place for a long time.
This pattern is consistent with the broader market view that Bitcoin entered the latest period of stress from a cleaner starting point than earlier in the quarter.
In its analysis of the Iran conflict, CoinShares argued that before the recent military escalation, whale distribution was already heavy, valuations were already compressed, and leverage was already approaching long-term norms.
Much of that reset had already taken place, leading to the next shock in a market that was less over-positioned.
On-chain and derivatives data define the scope of
Although market structure data shows improvement, the possibility of a breakout still depends on whether Bitcoin can sustain above recent recovery levels.
According to Glassnode, Bitcoin passed through the high supply zone of $59,000 to $72,000 and entered the thin trading band of $72,000 to $82,000, where historical volume is light.
The company said about 60% of circulating supply is profitable, below the 75% level consistent with the more established early bull phase of past cycles.
This leaves Bitcoin in a zone where the market has repaired some of the initial panic damage, but it has yet to show that profit-taking can be consistently absorbed at higher prices. If $70,000 remains stable, there will be a stronger case for challenging the upper end of that thin range. a
But a return to the old $59,000 to $72,000 cluster would return to a more crowded market where supply has traditionally limited progress.
The placement of options shows the same conclusion.
Deribit, owned by Coinbase, said downside hedges were concentrated between $61,000 and $64,000, with open interest building at higher strike prices such as $75,000 and $125,000. The exchange said in a recent note that above $75,000 could trigger dealer hedging flows and add momentum to the upside.
This gives traders a relatively clear map. Protection is concentrated in the area below $60,000.
The $75,000 level is where upward positioning can start to have a stronger impact on market mechanics. Between these points, Bitcoin remains within a range formed by both macro pressures and stable product demand.
Citi added another reference point earlier this month, announcing a 12-month baseline target for Bitcoin of $112,000, with a bullish target of $165,000 and a recession target of $58,000.
These numbers provide a broader context of the current position of the market. A recovery to $75,000 and then $82,000 would move the price path closer to the upper end of that outlook. Still, renewed pressure from oil and policy expectations will draw attention back to the downside scenario.
Flows between assets indicate selective relocation
Extensive asset allocation data suggests that investors are responding to conflict with a combination of prudence and selective risk-taking, rather than a simple flight to traditional havens.
Investors put $62.2 billion into stocks, $10.2 billion into bonds, $1 billion into cryptocurrencies and $23.5 billion into cash in the past week, while withdrawing $4.5 billion from gold, Reuters reported, citing data from BofA Global Research and EPFR.
This combination indicates selective bullish buying alongside a significant move towards cash. It also shows that Bitcoin remains part of the investable risk complex, even during periods of military escalation and energy surges. Although the market remains focused on oil, inflation, and the Fed, flows into the token continue.
In the case of Bitcoin, the next steps will likely depend largely on the direction of oil.
If Brent retreats and inflows into exchange-traded and other investment products continue, a break above $75,000 and a transition to the $72,000 to $82,000 air gap identified by Glassnode will become more likely.
However, if oil prices continue to rise, inflationary pressures will remain, the backdrop for tightening policy will remain, and attention could shift back to $64,000 and then $58,000.
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