Bitcoin astoundingly bounced back to $106,000, indicating a robust demand from institutional investors despite the escalating global chaos. The swift recovery followed a substantial 8% plunge in Bitcoin’s hashrate, sparking worries about mining stability in the face of Middle East conflicts.
Bitcoin (BTC) reclaimed its position at $106,000 on Monday after a temporary slide to below $98,500 on Sunday, a first in 45 days. Market tensions eased as US President Donald Trump declared a complete ceasefire between Israel and Iran. Traders are now contemplating whether Bitcoin can surge towards $110,000 or if the risk of a downside still persists.
Despite the fluctuating prices, Bitcoin’s derivatives market remained resilient. The price shift resulted in $193 million worth of bullish leveraged Bitcoin positions being liquidated, equivalent to 0.3% of total futures open interest. The current $68 billion in leveraged positions has barely changed since Saturday.
Notably, the 4.4% fall in Bitcoin’s value over a 12-hour span isn’t considered drastic by historical standards. Similar downturns have occurred thrice in the past month. However, traders fear that prolonged conflict in Iran can put a strain on the global economy, encouraging investors to adopt a more conservative, risk-averse stance.
There was speculation about potential disruptions to mining operations in the region due to a significant decline in Bitcoin’s hashrate. Between Sunday and Thursday, the hashrate dipped 8%, from 943.6 million terahashes per second (TH/s) to 865.1 million TH/s.
In the meantime, oil prices plummeted on Monday after peaking at $77 on Sunday. This coincided with a 1% increase in the S&P 500 index. Traders are now speculating on the likelihood of the US Federal Reserve (Fed) reducing interest rates soon.
While it might be premature to assume that Bitcoin will surge to $110,000 based solely on the hope of Middle East de-escalation, the quick recovery above $100,000 suggests that institutional interest in Bitcoin remains strong, even amidst global tensions.
