Why isn't Bitcoin concerned about the Middle East war?

▲ USA, Iran, Bitcoin (BTC)/AI generated image ©

Amidst the war crisis in the Middle East, Bitcoin (BTC) has shown unwavering strength, breaking past $78,000. An analysis suggests that this remarkable resilience is underpinned by massive institutional capital and unprecedented global liquidity expansion, drawing significant market attention.

According to FXStreet, an investment media outlet, on April 23 (local time), Bitcoin demonstrated remarkable price resilience, unlike other risk assets such as the U.S. stock market, even in the face of the immense geopolitical risk of the Iran war, reaching a recent 11-week high of $78,333. An analysis suggests that in addition to technical factors—such as having already undergone a correction of over 50% from its peak and establishing a floor before the war broke out—strong internal fundamentals are at play, breaking the past pattern of declining alongside the stock market during conflict periods.

At the core of this is the fierce accumulation by institutional investors. Since March, over $3 billion has poured into Bitcoin spot Exchange Traded Funds (ETFs). Notably, MicroStrategy aggressively purchased more than 815,000 units in the first quarter alone, despite holding unrealized losses of $14.46 billion, surpassing even BlackRock, a dominant institutional player. Major Wall Street banks are also joining in; following Morgan Stanley's Bitcoin Trust (MSBT) listing on the New York Stock Exchange in early April, Goldman Sachs has also joined, solidifying Bitcoin's position as an asset class.

Macroeconomic liquidity expansion is also a powerful engine for Bitcoin's rise. Global M2 money supply has continuously expanded over the past six months, and this week, the U.S. Treasury is expected to conduct its largest-ever Treasury buyback of $15 billion, creating a favorable environment for excess capital to flow into Bitcoin.

Furthermore, expectations for expanded utility in the real economy are also stimulating investor sentiment. Iran, under U.S. sanctions, is reportedly considering collecting a toll of approximately $1 per barrel from oil tankers passing through the Strait of Hormuz, payable in cryptocurrencies like Bitcoin or Chinese yuan. If adopted as an actual payment method in this strait, which handles 20% of the world's crude oil shipments, it is expected to lead to an enormous surge in demand and a rapid rise in Bitcoin's status as a global trade settlement tool.

Technical analysis also indicates a wide-open door for further upside. If Bitcoin closes above the 61.8% Fibonacci retracement level of $78,490 on the weekly chart, a major rally towards the next target, the 100-week Exponential Moving Average (EMA) of $82,568, could unfold. The weekly Relative Strength Index (RSI) is rising to 46, moving out of the oversold zone, and the Moving Average Convergence Divergence (MACD) is forming a bullish Golden Cross with a positive histogram, suggesting that Bitcoin's unstoppable surge, riding the wave of liquidity, is expected to continue for some time.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*