Why Bitcoin Doesn't Care About the Middle East War?

▲ US, Iran, Bitcoin (BTC)/AI Generated Image ©

Amidst the war crisis in the Middle East, Bitcoin (BTC) has shown unwavering strength, breaking past $78,000. An analysis suggests that this remarkable resilience is underpinned by massive institutional capital and unprecedented global liquidity expansion, drawing significant market attention.

According to investment specialized media FXStreet on April 23 (local time), despite the immense geopolitical risk of the Iran war, Bitcoin showed remarkable price resilience, unlike other risk assets such as the US stock market, reaching a recent 11-week high of $78,333. The analysis suggests that breaking the past pattern of declining alongside the stock market during conflicts and showing unique strength is due not only to technical factors—having already undergone a more than 50% correction from its peak before the war, establishing a bottom—but also to solid internal fundamentals.

At its core is the fierce accumulation by institutional investors. Since March, over $3 billion has poured into Bitcoin spot Exchange Traded Funds (ETFs). Notably, MicroStrategy aggressively purchased, acquiring over 815,000 units in total, even while incurring $14.46 billion in unrealized losses in Q1 alone, surpassing even BlackRock, a dominant institutional player. Major Wall Street banks are also joining in; following Morgan Stanley's Bitcoin Trust (MSBT) listing on the New York Stock Exchange in early April, Goldman Sachs has also joined, solidifying Bitcoin's position as an asset class.

Increased macroeconomic liquidity is also a powerful engine for Bitcoin's rise. Global M2 money supply has continuously expanded over the past six months, and with the US Treasury expected to conduct its largest-ever bond buyback of $15 billion this week, a favorable environment has been created for excess capital to flow into Bitcoin.

Furthermore, expectations for expanding utility in the real economy are stimulating investor sentiment. Iran, under US sanctions, is reportedly considering collecting a transit fee of approximately $1 per barrel from oil tankers passing through the Strait of Hormuz, payable in virtual assets such as Bitcoin or Chinese Yuan. If adopted as an actual payment method in this strait, which handles 20% of the world's crude oil shipments, it is expected to lead to an immense surge in demand and a rapid increase in its status as a global trade settlement method.

Technical analysis also keeps the door wide open for further upside. If Bitcoin closes above the 61.8% Fibonacci retracement level of $78,490 on the weekly chart, a major rally towards the next target, the 100-week Exponential Moving Average (EMA) of $82,568, could unfold. The weekly Relative Strength Index (RSI) is rising to 46, moving out of the oversold zone, and the Moving Average Convergence Divergence (MACD) is forming a bullish Golden Cross with a positive histogram, leading to expectations that Bitcoin's unhindered surge, riding the wave of liquidity, will continue for some time.

*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.*