Important takeouts:
Bitcoin (BTC) recovered $108,000 on Monday after retesting its support level of $104,000 over the weekend. The profits came as conflicts in the Middle East led investors to scale back expectations for US interest rate cuts and show stronger confidence in the potential for Bitcoin’s upside.
As shown by Bitcoin derivative metrics, traders’ sentiment remained stable despite the deterioration of socioeconomic outlook.
Bitcoin futures premium reached 5% on Monday, the baseline for neutral markets. These monthly contracts usually trade at a premium of 5% to 10%, taking into account the long settlement period. It was below the 8% recorded in late May, but there was mostly response during the retest of $101,000 on June 5th, indicating the market’s resilience.
The US-listed Spot Bitcoin Exchange Trade Fund (ETF) has eased potential flu concerns in a conflict involving Iran, one of the world’s largest oil producers, by arriving in its strategy to buy an additional $1.05 billion on Monday.
Oil prices initially surged Sunday, with West Texas intermediate (WTI) futures reaching $78 before pulling back. By Monday, WTI futures had fallen to around $71.50 per barrel. This is a move coincided with a 1.5% increase in Nasdaq futures. According to Yahoo Finance, market participants hope that tensions in the Middle East will be easier.
Bitcoin faces hurdles from energy costs and delayed fed rate reduction
As some analysts point out the risk of rising energy prices, the path for Bitcoin to regain $110,000 can be more difficult than expected. “The market reaction was so modest that there’s room for disappointment if things escalate,” Philippe Gijsels, chief strategy officer at BNP Paribas Fortis, told CNBC on Monday.
In addition to concerns about the energy market, increasing uncertainty is reducing the likelihood of US Federal Reserve reduction interest rates. According to CME Fedwatch, rising inflationary pressures mean that traders are 63% likely to maintain a 63% chance of maintaining a 4% or more charge by November, and by November, they will maintain a 4% or more charge by November.
The growing confidence of Bitcoin traders was also evident in the BTC options market, where delta skew (put calls) of 25% fell to neutral 1% on Monday after reaching 6% on Sunday. Measurements above 5% are generally considered bearish and reflect the higher demand for protective put options from market manufacturers and arbitrary tables.
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Despite increasing uncertainty and fears of recession, Bitcoin has been down just 4% below its all-time high of $111,965 since May 22nd, but its derivative metrics remain neutral. This environment has failed to cause panic amid the escalation of global tensions, thus supporting further price increases.
Yadeni Research’s Ed Yaldeni said on Monday that US President Donald Trump “doesn’t seem to be prepared to move him away from the trade war as much as he hopes.”
Ultimately, regardless of Middle Eastern development, Bitcoin’s $112,000 pass is closely tied to a decline in tariff-related uncertainty.
This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.
