Bitcoin, threatened by $75,000 due to soaring oil prices... What are the chances of defending the support line?

▲ Bitcoin (BTC)/AI generated image

Bitcoin (BTC) is reacting sensitively to macro variables, testing the $75,000 support line due to the resurgence of geopolitical instability and a sharp rise in international oil prices.

According to crypto media outlet FXStreet on April 20 (local time), Bitcoin rose to a 10-week high of $78,000 last week but gave back gains over the weekend. As hopes for peace in the Middle East faded, Bitcoin is currently seeking a support base around $75,000. The re-escalation of conflict between the US and Iran, leading to the potential closure of the Strait of Hormuz and a roughly 6% surge in oil prices, has sharply dampened investor sentiment. Rising oil prices are fueling inflation concerns, pushing up Treasury yields, and putting pressure on risk assets like Bitcoin.

Despite macroeconomic uncertainties, institutional investor buying remains a backbone supporting the market. Last week, Bitcoin spot ETFs saw a net inflow of $996.4 million, marking the strongest weekly inflow since mid-January. Cumulative inflows over the past three weeks reached approximately $1.8 billion, indicating continued accumulation by institutions. Notably, the participation of mainstream finance is expanding further, with Morgan Stanley launching its Bitcoin spot ETF, MSBT, and Goldman Sachs also introducing related products.

From a technical analysis perspective, Bitcoin has continued to trade within an ascending channel formed since early February. The price broke above a multi-month downtrend line that started from the $126,000 peak but failed to establish a foothold above the $78,000 resistance. Currently, Bitcoin is consolidating below the 23.6% Fibonacci retracement level of the decline from $126,000 to $60,000. With the Relative Strength Index (RSI) remaining above 50, a resurgence in buying pressure could open the way past $78,000 to the psychological resistance level of $80,000.

The downside support lines are located at the trendline support near $72,000 and the 50-day simple moving average formed at the $70,000 level. If the $65,000 support line breaks, it would signal lower lows, increasing the likelihood of a deep correction down to $60,000. Currently, Bitcoin is in a position where volatility could increase depending on the developments in the Middle East. The fact that oil prices remain below $100 and Bitcoin prices are stabilizing reflects the market's expectation that the conflict will eventually be resolved.

The estimated average purchase price of institutional investors, which is higher than the current price at around $81,000, is expected to act as a strong resistance zone in the future. Since this is a zone where break-even selling pressure could emerge, stronger momentum is needed for a breakout. Market participants are awaiting a recovery in risk appetite through geopolitical tension de-escalation and alleviation of inflation concerns. All eyes are on global financial markets to see if Bitcoin can overcome this correction and reclaim the $80,000 mark.

*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.*