Bitcoin fell in price on Tuesday, as cryptocurrencies were drawn into general market volatility ahead of the deadline set by US President Donald Trump for Iran, UNN reports with reference to Bloomberg.
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The largest cryptocurrency fell 2.2% and traded around $68,460 at 7:20 a.m. London time. The decline erased the previous day's gains, when it briefly surpassed $70,000 for the first time since March. Other digital assets also fell. Ether, the second largest token, fell 2.8%.
Global stock markets fluctuated ahead of Trump's deadline on Tuesday, who threatened to bomb civilian infrastructure in Iran if the Strait of Hormuz was not opened. S&P 500 futures fell 0.4%.
Sentiment towards Bitcoin "remains bearish in the short and medium term," said BTC Markets analyst Rachel Lucas. The market is in a holding pattern, she added, "bulls lack the confidence to sustain breakouts, and bears fail to achieve a decisive breakthrough."
The risks of escalating war with Iran are largely keeping investors on the sidelines after reports that Iran rejected a ceasefire proposal. Trump said that opening the strait, a crucial trade route, would be part of any deal to end the war.
Since the beginning of the war, oil prices have risen sharply. On Tuesday, Brent crude oil prices rose, increasing gains by approximately 50% since the conflict began in late February. Gold prices remained roughly at the same level throughout the day and fell by more than 10% since the beginning of the war.
Bitcoin shows relative resilience, and there are signs of easing pressure from institutional sellers. On Monday, spot Bitcoin exchange-traded funds listed on US exchanges received $471.3 million in net inflows, adding to last week's $22.3 million inflow.
Since early March, Bitcoin has mostly remained in the range of $65,000 to $75,000. After a sharp drop in October, cryptocurrency trading has been weak. Now traders are awaiting the end of the war and the adoption of new cryptocurrency legislation in the US, which could potentially push digital assets higher.
"The bullish scenario depends on two catalysts: a confirmed and sustained ceasefire between the US and Iran, which will lower the price of oil below $100, and the adoption of the Clarity Act in late April, which institutional market participants are closely watching as a regulatory unblocking," Lucas said.