Bitcoin Resilience Amid Middle East Tensions and Rising Commodity Costs

Bitcoin (BTC) staged a notable recovery, reclaiming the $108,000 threshold on Monday following a retest of the $104,000 support level over the weekend. This price action occurred despite escalating geopolitical tensions in the Middle East and a persistent upward outlook in the US, suggesting robust market confidence.

Market Confidence Sustained Despite Uncertainty

Despite the increasingly complex global environment, traders’ sentiment indicators showed resilience. Spot Bitcoin ETF inflows continued apace, and Bitcoin derivative metrics, such as the 30-day futures premium which reached a neutral 5%, pointed towards steady confidence rather than heightened nervousness. US-listed spot Bitcoin ETFs attracted $301.7 million in net inflows recently.

However, the path towards higher levels faces challenges. Energy costs loom large, as increasing oil prices post-Middle East conflict could pressure energy-intensive sectors potentially impacting miners. Insights from BNP Paribas Fortis chief strategy officer Philippe Gijsels suggest the market’s modest reaction to geopolitical flare-ups warrants caution.

Broader Economic Outlook Shifts

Mounting concerns about inflation and the potential for an economic recession faded slightly as market participants revised expectations for Federal Reserve actions. Trading platforms like CME FEDWatch indicated a rising likelihood (63%) the Fed will keep interest rates near 4% until at least November.

Oil prices initially spiked following the Middle East conflict’s outbreak before easing by Monday. WTI crude dipped below $72 per barrel around Monday morning.

Traders’ Confidence Steamrolls Bearish Signals

Simultaneously, signs of trader confidence grew in the BTC options market. The 25% delta skew slipped back to a neutral 1%, below the typically bearish 5% threshold, signaling less demand for protective put options.

Unsettled dynamics in trade policy also figure into the picture. Market veteran Ed Yardeni commented on the ongoing trade war situation, suggesting a resolution appears remote.

Despite proxies of global uncertainty and recession risks, particularly concerning Middle East fallout, Bitcoin’s price remains relatively close to its all-time high. The neutral macro-economic reading from derivative markets continues to indicate the bullish potential for bullrun continuation.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.