Bitcoin reaches a one-month peak at $73,800, maintaining its strong performance since the onset of the conflict in Iran.

Decreasing oil prices are beneficial, yet a rebound appeared likely following some of the most negative sentiment recorded in bitcoin’s history.

Bitcoin (BTC) price on Friday (CoinDesk)

Key points:

• Bitcoin experienced a significant increase on Friday, approaching the $74,000 mark during morning trading in the U.S.
• The upward movement began Thursday night following U.S. Treasury Secretary Scott Bessent’s announcement that the Trump administration was implementing measures to mitigate oil price pressures.
• Funding positioning for perpetual futures traders has remained negative for the longest duration since the previous major downturn in 2022.

Bitcoin BTC$72,835.62 is building on overnight increases in early U.S. trading on Friday, continuing to demonstrate robust price action relative to several months of underperformance compared to assets like equities and precious metals.

Trading at $73,800, bitcoin has risen nearly 5% in the last 24 hours, with a significant portion of those gains occurring after Scott Bessent’s remarks on Thursday evening regarding the administration’s efforts to control rising oil costs.

Bitcoin has risen approximately 11% since the onset of the Iran conflict, outperforming major U.S. stock indices and gold, both of which have seen declines since the military actions began around two weeks ago.

On Friday, WTI oil is priced at $94.50 per barrel, a decrease from a peak of nearly $98 on Thursday. U.S. stock markets are reflecting gains of approximately 0.5%.

Oil heightens stagflation risks

The recent surge in oil prices is exerting direct pressure on household expenses and, if persistent, could reduce consumer expenditure and hinder economic growth, as noted by Olu Sonola, head of U.S. economics at Fitch Ratings.

"While the overall economy is still projected to grow at a normal rate, that outlook increasingly appears fragile as downside risks mount. … The Fed may overlook areas of declining growth, but a resurgence in inflation significantly constrains its options, potentially leaving policy in a stalled position for months," he stated in a note.

Relief rebound

Following a period marked by some of the most negative sentiment in bitcoin’s history, it is perhaps not unexpected that there have been some slight rebounds recently.

Funding positioning for perpetual futures traders has been negative for the longest stretch since late 2022, noted K33 Research analyst Vetle Lunde. This indicates that traders shorting bitcoin are compensating long holders to maintain their positions, leading to a negative funding rate. Late 2022 coincided with the aftermath of the FTX collapse, when BTC traded around $16,000 compared to $69,000 a year prior.

The 30-day average funding rate has now been negative for 14 consecutive days, the longest since December 2022, Lunde highlighted. These negative periods have historically aligned with local price bottoms over the last seven years, he added.

Meanwhile, bitcoin open interest in perpetual and dated futures has increased by 9% in the last 24 hours to approximately 700,000 BTC, marking the highest level since February 6. Altogether, this creates conditions favorable for a short squeeze.

Bitcoin and periods with negative 30-day average perpetual funding rates (K33 Research)

Friday increase

The day is not yet complete, but this could mark the first Friday gain since the conflict in the Middle East commenced on February 27. This may indicate a less turbulent weekend for the cryptocurrency market, which has recently shown a tendency to decline on Saturdays and Sundays.

March is also turning out to be a pivotal month for bitcoin. The asset has appreciated about 8% so far this month. While it is still early, a March increase would break BTC’s streak of five consecutive months of losses.