Bitcoin, the world's largest cryptocurrency, surpassed the $80,000 threshold on Monday, marking its first time since late January. The rally was fueled by shifting expectations regarding the Middle East situation and improving prospects for cryptocurrency regulations, leading to a resurgence in market risk appetite. Data indicated that Bitcoin climbed as much as 2.1% during the session, hitting a peak of $80,594, before fluctuating around the $80,000 mark in New York trading hours. Other major digital assets, including Ethereum and Solana, also posted modest gains.
Since the escalation of tensions between the U.S. and Iran, Bitcoin has accumulated an increase of approximately 20%, demonstrating the overall resilience of digital assets amid geopolitical shocks and rising oil prices. Market sentiment was further buoyed by optimistic policy expectations. Investors are hopeful that U.S. lawmakers may reach an agreement on provisions related to stablecoin yields, which could pave the way for advancing cryptocurrency-related legislation in the Senate.
Derivatives market data revealed that over the past 24 hours, short position liquidations in the cryptocurrency market reached about $359 million, significantly higher than the $150 million in long position liquidations, indicating that short covering contributed to the price rise. Despite Bitcoin's perpetual futures funding rate remaining negative, the price still managed to break through, suggesting strong upward momentum. Additionally, on the crypto options platform Deribit, open interest for call options with a strike price of $80,000 increased notably, becoming one of the most popular contracts and reflecting growing expectations for further gains above this level.
Market assessments of the Middle East situation remain complex. U.S. President Donald Trump stated that guidance would be provided for vessels not involved in the conflict, while Iran warned that any U.S. intervention in the Strait of Hormuz could be viewed as a violation of the ceasefire agreement. Geopolitical tensions still present "tail risks" that could unexpectedly impact the market.
Bitcoin had previously reached an all-time high of over $126,000 in October of last year before retreating to around $60,000 in February. The recent price recovery has been partly supported by sustained institutional capital inflows. Data showed that U.S. Bitcoin exchange-traded funds recorded approximately $630 million in net inflows last Friday.
Market participants consider the $80,000 level to hold significant psychological importance. Richard Galvin, Executive Chairman of crypto investment firm DACM, noted that this price point has long been a major resistance level for the market. A decisive breakthrough, he suggested, could provide further upward momentum for the asset class.
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