CryptoQuant warns that rising oil prices, attributed to Middle East tensions, could negatively impact Bitcoin and inflation.
As tensions in the Middle East escalate, oil prices have surged over 60% this year, with analysts at CryptoQuant cautioning that this rise could negatively impact inflation and the cryptocurrency market.
“Historically, periods when oil prices regain strength often coincide with BTC end-of-cycle phases,” noted analyst Darkfost.
The spike in oil prices, which have now surpassed $115 per barrel, has been attributed to disruptions in the Strait of Hormuz, a critical shipping route for global oil supplies. The potential for further supply shocks is raising concerns among market participants.
With the global markets already reacting negatively, Asian stock indices opened lower, reflecting the region's dependence on Middle Eastern energy. The Nikkei 225 index fell over 6%, while the Kospi dropped around 8%.
Interestingly, as traditional markets faltered, trading activity in Bitcoin surged on the Bitflyer exchange in Japan, with volumes increasing by 200%. Bitcoin's price rose by 2.05% against the yen, trading at approximately $67,800 after dipping to $65,700 earlier.
Market Resilience Amidst Volatility
Despite the turmoil in risk assets, analysts from QCP described Bitcoin's performance as “unexpectedly resilient.” While global equities have turned defensive, some crypto investors are hedging against potential declines through short-term contracts.
“The flow of options indicates a more complex picture,” experts observed, highlighting a significant purchase of a BTC straddle that suggests expectations of high volatility.
While the current market sentiment remains cautious, the structure of open interest shows strong demand for call options at strike prices of $75,000 and $125,000, although achieving these levels seems unlikely.
“Bitcoin is still far from the status of 'digital gold,' but its role as a 'digital safe haven' is becoming increasingly evident,” analysts concluded.
Increased Trading Activity on Hyperliquid
On the trading platform Hyperliquid, oil derivatives saw a record daily volume of over $1 billion, reflecting the heightened activity due to geopolitical tensions. The perpetual contract for crude oil peaked at around $117 before correcting to $101.
With the onset of conflict between the U.S. and Iran, traders shifted to Hyperliquid for 24/7 trading capabilities, marking a significant increase in trading volumes similar to a previous surge during a silver rally in January.
As demand for traditional assets rises amidst market closures, the native token HYPE is expected to strengthen against other cryptocurrencies, having gained 1.8% in the past day and 10.3% over two weeks.
Earlier in March, analysts discussed the potential influence of the Iran conflict on Bitcoin dynamics, forecasting various scenarios as the situation develops.
