Bitcoin Holds Near $68,000, Geopolitical Risks Weigh on Sentiment
Bitcoin hovered around $68,000 in late March, holding near a two-week low after renewed selling pressure halted the recovery. Risk-on sentiment weakened as escalating threats and attacks involving the US, Israel, and Iran prompted investors to reduce exposure to riskier assets.
The primary trigger came from tensions in the Strait of Hormuz. US President Donald Trump threatened to attack Iranian power plants if the waterway was not reopened, while Iran warned it would retaliate by targeting US and Israeli assets if its energy infrastructure was attacked. This escalation pushed up oil and commodity prices, increasing market uncertainty.
In such conditions, Bitcoin tends to move in line with other riskier assets. Since the outbreak of the Middle East war, the largest cryptocurrency has fallen more than 20%, extending a correction that began in late October after Bitcoin fell from its record high.
Additional pressure came from weakening global stock markets and riskier assets, which reduced inflows into crypto. At the same time, higher energy costs have the potential to increase mining costs, adding to fundamental supply-side constraints and miner profitability.
Sentimental support from hopes for clearer crypto regulations has also weakened as market attention shifts to geopolitical risks. When investor focus shifts from narrative-driven to risk management, crypto volatility typically increases, and price movements become more reactive to headlines.
Going forward, Bitcoin's direction will be heavily influenced by the course of the Iran war and its impact on energy prices, as well as global risk sentiment. If oil remains high and the market continues to anticipate tighter monetary policy, the recovery potential for crypto will likely remain limited.
Source: Newsmaker.id
