Market risk appetite has recovered. On March 16, the highly speculative cryptocurrency market experienced a significant rally. Bitcoin broke through $74,000 during the session, with a 24-hour gain approaching 4% at one point. Ethereum surpassed $2,300, seeing an increase of over 10%. Other cryptocurrencies like Cardano, Solana, and XRP also moved higher. Analysts noted that the rebound in cryptocurrencies reflects, to some extent, a recovery in global investor risk appetite.
According to data from CoinGlass, nearly 99,200 traders were liquidated globally in the past 24 hours, with total liquidations across the market exceeding $400 million. Over 80% of these were short positions.
As global energy markets face pressure from Middle Eastern tensions, U.S. Treasury Secretary Janet Yellen attempted to cool market sentiment by stating that the current oil supply gap does not constitute a crisis. Yellen indicated that oil prices are "very likely" to fall well below $80 per barrel in the coming months, pointing to a global supply deficit of 10 to 14 million barrels per day in Gulf crude markets. She emphasized that Iranian oil tankers have been continuously passing through the Strait of Hormuz, with the U.S. adopting a tacit approval stance to ensure uninterrupted global supply.
On the evening of March 16, European and U.S. stock markets surged significantly, while international oil prices experienced a sharp decline. At the time of writing, WTI crude oil had fallen by over 4%.
European and U.S. stock markets showed strong gains during the late trading session. As of the latest update, the Dow Jones Industrial Average was up 1.16%, the Nasdaq Composite rose 1.46%, and the S&P 500 increased by 1.27%. In Europe, the Euro Stoxx 50 index gained 0.72%, Germany's DAX index advanced 0.86%, and the UK's FTSE 100 index climbed over 1%. Among individual stocks, technology shares led the gains. Micron Technology rose more than 5%, Intel increased over 4%, Meta Platforms gained more than 3%, while Nvidia and Tesla both advanced over 2%. Apple saw an increase of more than 1%. The Nasdaq Golden Dragon China Index jumped over 2%, with Li Auto rising nearly 5%. JD.com, Alibaba, and NetEase all gained more than 2%.
Regarding the latest developments in Iran, UK Prime Minister Keir Starmer stated on March 16 that restoring navigation through the Strait of Hormuz is "not easy," adding that Britain is working with allies to develop feasible plans to restore freedom of navigation in the strait. Starmer also responded to comments from former U.S. President Donald Trump, clarifying that Strait of Hormuz navigation is not a NATO mission and that the UK "will not be drawn into a broader (Middle Eastern) war." German government spokesperson Steffen Hebestreit similarly stated on March 16 that the conflict involving the U.S., Israel, and Iran is not related to NATO.
On the same day, Iranian Foreign Minister Hossein Amir-Abdollahian reiterated that Iran has not requested a ceasefire and will continue its resistance. Additionally, Iran's Islamic Revolutionary Guard Corps claimed to have launched precise and heavy strikes on a U.S. base in Abu Dhabi at dawn, causing significant explosions.
According to reports from Iranian media cited by Xinhua News Agency, Iran's Supreme Leader Ali Khamenei appointed former IRGC commander Mohsen Rezaei as a military advisor on March 16.
Notably, international oil prices fell sharply on the evening of March 16. At the time of writing, WTI crude was down over 4%. Harris Khushad, Chief Investment Officer at Chicago-based Karobaar Capital Management, commented, "The market had priced in substantial geopolitical premium last week, so traders appear to be waiting for clearer signals of actual supply shortages before pushing prices significantly higher." He added that following the attack on Iran's Kharg Island, the market seems to be pricing in transportation disruptions rather than a comprehensive supply shock.
The cryptocurrency rally resulted in liquidations for 99,200 traders. During trading on March 16, Bitcoin broke above $74,000 while Ethereum surpassed $2,300. At the time of writing, Bitcoin was up 3.86%, trading around $74,300, while Ethereum had gained 9.83% to reach $2,303. Other cryptocurrencies also advanced: Cardano rose over 8%, Solana gained more than 7%, XRP increased over 5%, and BNB was up more than 3%.
CoinGlass data showed that total crypto contract liquidations reached $431 million over the past 24 hours, affecting 99,200 traders. Short position liquidations accounted for $345 million, while long position liquidations exceeded $86 million. The largest single liquidation order occurred on Bitfinex-tBTCF0:USTF0, valued at $6.94 million.
Since the outbreak of conflict involving Iran in late February, Bitcoin has outperformed many traditional assets. Gold prices have declined nearly 5% this month, while Bitcoin has gained over 10%.
"Despite geopolitical uncertainties, cryptocurrencies have been in a bullish sentiment over the past week," said Caroline Mauron, Co-founder of Orbit Markets. She noted that Bitcoin is likely to break through the $75,000 level as both retail and strategic buyers believe the worst of the cryptocurrency downturn is over.
Furthermore, inflows into exchange-traded funds (ETFs) appear to indicate returning institutional confidence. Last week, 12 U.S.-listed spot Bitcoin ETFs saw net inflows exceeding $763 million, marking the third consecutive week of inflows. So far in March, total net inflows into spot Bitcoin ETFs have reached $1.3 billion.
While Bitcoin has historically been a speculative bet, over the past two weeks during geopolitical tensions, it has behaved more like a macro hedge. Recently, former U.S. President Donald Trump called on nations to help reopen the critical trade waterway, the Strait of Hormuz.
James Butterfill, Head of Research at CoinShares, stated in a report that several key factors coincided at the right time, providing momentum to the cryptocurrency market. Technical indicators had previously suggested Bitcoin was nearing the bottom of its current cycle.
"Butcoin tends to perform well during geopolitical turmoil, not because of its volatility, but partly due to its characteristics as a non-sovereign, censorship-resistant asset," Butterfill wrote. He added that investors pulling funds from U.S. Treasuries demonstrates that traditional safe-haven assets have lost some appeal.
Will the rally continue? For most of this year, Bitcoin has fluctuated between $60,000 and $75,000, with several attempted breakouts ultimately failing.
Bloomberg pointed out that since the outbreak of the Iran conflict, the original cryptocurrency has outperformed stocks and gold, but this says more about how much it had previously fallen rather than indicating its future direction. The token remains down more than 40% from its peak in October.
"You can see the pattern. The market rallies slightly, open interest increases, Bitcoin's funding rate turns negative, and then we get forced liquidations at higher levels," said Jasper Demeyer, Trading Strategist and OTC Trader at market maker Wintermute. A negative funding rate indicates that short sellers are paying a premium to maintain their positions, suggesting bearish market sentiment.
Demeyer added that compared to late 2025 when Bitcoin traded between $85,000 and $95,000 for months, current trading volumes are lighter. This makes the token more susceptible to sudden price swings.
Bitcoin hit a record high above $126,000 in October last year, only to begin a months-long decline shortly after. On October 10, approximately $19 billion in leveraged cryptocurrency bets were wiped out. Since then, prices have steadily declined, with each brief rally noticeably lacking conviction.
"This is a pattern seen in previous crypto bear markets: a sharp sell-off, a 20% pullback, and then stagnation. We lack breakout momentum," said Andrea Kobergich, Head of Derivatives Trading at AMINA Bank.
It's undeniable that Bitcoin has risen since the Iran conflict began, while stock markets have seen selling pressure. Karl Naim, Chief Commercial Officer at XBTO, believes this indicates that Bitcoin, as a maturing asset, is beginning to move independently from risk markets. Data from Bloomberg also shows renewed interest in Bitcoin ETFs, with investors net buying for three consecutive weeks, accumulating over $2 billion in inflows.
Overall, Bitcoin's gains still lag behind those of "HALO assets" (heavy, low-obsolescence physical assets). In a market focused on metals and oil supply, the technical feature of "limited supply" alone may not be enough to attract sufficient attention.
Jeff Mei, Chief Operating Officer of BTSE, noted that Iran's statement about closing the Strait of Hormuz only to "enemy" vessels suggests that only U.S. and Israeli ships would be threatened. "If the conflict appears nearing an end, Bitcoin could rebound quickly and revisit the $100,000 level. If the conflict seems likely to drag on, Bitcoin might pull back toward $60,000," Mei said.
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