Bitcoin (BTC) spent nearly three weeks hovering around the 60,000 USD mark, at one point dipping close to this important psychological threshold as the Middle East conflict escalated. However, this afternoon on 4/3, the world's largest cryptocurrency showed strong signs of recovery, reclaiming the 70,000 USD level around 4 p.m. (Vietnam time).
After 5 p.m., BTC approached 71,890 USD, marking an approximate 7% increase from yesterday. This also represents its highest price in about a month.
Other major cryptocurrencies, including Ether (ETH), XRP, and Solana (SOL), followed bitcoin's upward trend, rising 4-6%. The CoinDesk 20, an index of the top 20 cryptocurrencies by market capitalization (excluding stablecoins, memecoins, and exchange tokens), increased by over 5%. This demonstrates the asset class's growing resilience against instability in the Middle East.
"Bitcoin can now exhibit some defensive characteristics during times of crisis, but gold's decline indicates that even classic safe-haven assets are not immune to market dynamics, positioning bitcoin as a more flexible yet high-beta option", Tagus Capital stated. Tagus Capital is a venture capital fund that invests in companies and protocols building blockchain technology infrastructure. The beta coefficient (β) measures the volatility and risk of a stock or portfolio relative to the overall market's volatility.
Institutional demand remains an important supporting driver. Over the past five trading sessions, US spot Bitcoin ETFs attracted approximately 1,45 billion USD in net inflows. This is considered the primary channel for financial "whales" to invest in cryptocurrencies.
In a recent report, Glassnode indicated that momentum indicators are beginning to recover after a period of weakness. Bitcoin's relative strength index (RSI) rose to about 41 from 36 last week, though still below the neutral threshold of 50. This suggests that buyers are gradually regaining control of the market.
Spot market trading volume also increased to about 9,6 billion USD, up from 6,6 billion USD last week. Market breadth is becoming more balanced, signaling that the previous sell-off wave is gradually cooling down.
The derivatives market remains cautious. Glassnode reported that the cost of holding leveraged long positions has sharply decreased, while futures trading still shows sellers dominating buyers, reflecting the continued caution of leveraged traders.
BTC's rally occurred even as geopolitical conflicts escalated, with Iran threatening to block oil supplies through the Strait of Hormuz and raising the risk of global energy price inflation. Since the conflict initiated by Israel and the US last weekend, bitcoin experienced some correction, but its decline was capped around 65,000 USD.
Meanwhile, gold, a traditional safe-haven asset, peaked above 5,400 USD per ounce on 2/3 and has since fallen to around 5,100 USD. Asian stock indices, led by South Korea's Kospi index, fell sharply as oil import costs rose.
Tieu Gu (according to CoinDesk)
