Layla Zulfa
Bitcoin experienced a significant rally over the weekend as the conflict in the Middle East entered its third consecutive week, with the cryptocurrency’s bullish momentum carrying over into the early hours of Monday morning. The leading digital asset reached a peak of $74,157 during the Asian trading session, according to comprehensive data provided by the price aggregator CoinGecko. Although the price saw a minor retracement following the peak, Bitcoin continues to trade at approximately $73,978 at the time of publication, representing a 3.1% increase over the last 24 hours and a robust 9.1% gain over the past seven days.
This upward trajectory comes at a time of heightened global instability. Markets across the globe have been grappling with the escalating geopolitical tensions stemming from the U.S.-Iran war, a conflict that has introduced a new layer of volatility into traditional financial systems. Despite the broader market turmoil, Bitcoin has emerged as a focal point for investors seeking alternative liquidity and value preservation outside of traditional banking infrastructures.
Chronology of the Conflict and Market Reactions
The current geopolitical crisis began on February 28, marking a sharp pivot in international relations and immediate fluctuations in the commodities and equities markets. Since the onset of the conflict, the performance of traditional safe-haven assets has been uncharacteristically muted. Gold, which historically appreciates during times of war and political uncertainty, has seen a surprising decline of roughly 7% since late February. This divergence has led many analysts to reassess the role of digital assets in a modern "war-time" economy.
As the conflict progressed into its second week, the focus shifted toward the strategic security of global energy supply chains. By March 9, crude oil prices had hit a local low, only to begin a steady ascent as the threat of maritime blockades became more pronounced. Over the last two weeks, crude oil has risen nearly 28% from its March 9 low, currently trading at $99.25 per barrel. While this is a significant recovery, it remains below the peak of $119.48 recorded last week, reflecting the market’s ongoing struggle to price in the risk of a protracted military engagement.
Geopolitical Strategy and the Strait of Hormuz
A central factor in the current market anxiety is the status of the Strait of Hormuz, a critical chokepoint through which a significant portion of the world’s oil supply passes. U.S. President Donald Trump addressed the situation in a high-profile interview with the Financial Times, asserting that it would be “very bad for the future of NATO” if member allies did not actively participate in securing the passage.
This followed a series of statements made on the social media platform TruthSocial, where the President called upon nations that rely on oil shipments through the Hormuz Strait to “take care of that passage.” He emphasized that while the United States would assist “A LOT,” the primary responsibility for security should be shared among those with the greatest economic stake in the region’s stability. The rhetoric has heightened fears of a disruption in energy supplies, which in turn has influenced the macroeconomic environment that Bitcoin currently inhabits.
Macroeconomic Consequences and Liquidity Pressures
The relationship between the U.S.-Iran conflict and Bitcoin’s price action is not necessarily one of direct cause and effect, but rather a reaction to the resulting macroeconomic pressures. Tim Sun, a senior researcher at the crypto operator HashKey Group, noted that the current surge is driven by the long-term implications of the war on the U.S. economy. According to Sun, the combination of elevated oil prices, stagnant economic growth, and an expanding national deficit suggests that U.S. fiscal pressure will intensify in the coming months.
“The eventual result of these pressures is a funneling back into liquidity issues,” Sun explained. In this environment, Bitcoin serves as a sovereign, globally liquid asset that exists independently of traditional financial intermediaries. As fiscal concerns grow, investors increasingly look toward assets that cannot be devalued by government policy or restricted by the closure of traditional banking corridors.
On-Chain Data and the Conviction of Long-Term Holders
Analysis of on-chain metrics suggests that the current rally is supported by a fundamental shift in market participation. Data indicates that the selling pressure from “short-term emotional speculators” has largely been exhausted. This has left the majority of the circulating Bitcoin supply in the hands of medium-to-long-term holders who demonstrate a higher level of conviction.
Illia Otychenko, Lead Analyst at CEX.IO, highlighted a specific metric known as "Bitcoin Days Destroyed" (BDD). This metric measures the volume of long-dormant Bitcoin that is being moved or sold. Recently, BDD fell to its lowest level in nearly three years. “This signifies that the individuals with the deepest conviction in the asset are simply sitting on their coins,” Otychenko stated. He suggested that the geopolitical "noise" may have actually reinforced the patience of these holders, as they view the current environment as a validation of Bitcoin’s value proposition as a non-correlated asset.
Institutional Inflows and Technical "Tripwire" Levels
The recovery rally has also been bolstered by the stabilization of exchange-traded fund (ETF) inflows. For three consecutive weeks, Bitcoin ETFs have seen steady interest, providing a consistent source of demand that has helped absorb any residual selling pressure. This institutional participation has added a layer of legitimacy and stability to the price action that was absent in previous cycles.
Furthermore, technical data from the options market suggests there is room for further upside. Market intelligence firm Glassnode recently identified a large pocket of "negative gamma" near the $75,000 strike price. This level acts as a technical "tripwire." Institutional market makers, who hold a massive concentration of call options at this level, may find themselves in a position where they lose money if the price climbs significantly higher. To hedge their positions, these market makers are often forced to buy Bitcoin as the price approaches the strike, which can create a feedback loop that amplifies upward price movements.
Broader Implications and Future Outlook
While the technical and on-chain indicators appear bullish, some experts urge caution regarding the health of the current rally. Tim Sun of HashKey Group noted that in extreme geopolitical scenarios, the structure of such a rally might not be "entirely healthy," as it is born out of necessity rather than organic economic expansion. As the Middle East conflict extends, Bitcoin is likely to continue behaving as an alternative, cross-border asset capable of functioning outside the traditional financial system, but this role comes with inherent volatility.
Looking ahead, market participants are closely monitoring the upcoming March meeting of the Federal Open Market Committee (FOMC). The U.S. Federal Reserve’s stance on interest rates and its assessment of the macroeconomic outlook will be pivotal. If the Fed maintains a hawkish stance in the face of rising oil-driven inflation, it could create additional headwinds for all risk assets, including cryptocurrencies.
Despite these uncertainties, sentiment among some traders remains optimistic. Users on the prediction market Myriad currently assign a 55% probability to a broad crypto market rally this spring. As the world watches the developments in the Middle East and the ensuing diplomatic efforts to secure the Strait of Hormuz, Bitcoin remains at the center of a shifting financial paradigm—one where digital scarcity and borderless liquidity are increasingly valued in an era of global fragmentation.
The next several weeks will be critical in determining whether Bitcoin can sustain its position above the $74,000 mark or if the macroeconomic pressures of the U.S.-Iran conflict will eventually force a broader market correction. For now, the "digital gold" narrative is being put to its most rigorous test yet, as it outpaces traditional commodities in a period of significant international strife.
