Bitcoin Withstood Middle East Risk… Unveiling its 'Downside Defense Line'

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Despite the sharp drop over the weekend, the background behind Bitcoin's price holding the $75,000 level is a signal that geopolitical risks and institutional fund inflows are in a tense standoff.

According to FXStreet, an investment media outlet, on April 20 (local time), Bitcoin (BTC) saw a roughly 4.30% drop over the weekend, then rebounded near $75,000 on Monday, showing stability. Although investor sentiment was dampened by rising tensions in the Middle East, institutional fund inflows appear to have defended the downside.

The key variable in recent market volatility is the US-Iran conflict surrounding the Strait of Hormuz. Tensions reignited after the US Navy seized an Iranian cargo ship, and Iran declared it a violation of the ceasefire, blockading the strait again. As a result, international oil prices (WTI) rose by about 5% to over $88, putting a burden on risk assets across the board.

Nevertheless, institutional demand actually strengthened. According to SoSoValue data, Bitcoin spot ETFs saw net inflows of approximately $996.38 million last week, marking a positive trend for three consecutive weeks. This is the largest amount since mid-January and is considered a key factor supporting the market's bottom.

Technically, there is still room for a rebound. Bitcoin is trading above the realized price for traders, around $75,200, having converted a previous resistance level into support. If the uptrend continues, there is a possibility of testing the 61.8% Fibonacci retracement level at $78,490, and further, the psychological resistance level of $80,000.

However, downside risks still remain. The 50-day EMA at $71,925 acts as the primary support level, and if it breaks, there's a possibility of a correction down to the range of $68,950 and $67,412. Ultimately, the key variables that will determine future trends are the easing of tensions in the Middle East and the sustained inflow of ETF funds.

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