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Oil prices decreased as significant economies declared coordinated efforts to stabilize energy markets.
BTC‘s price bounce. (CoinDesk)
Key points:
- Bitcoin spearheads the crypto market rebound as oil prices fall.
- Major economies unveiled coordinated initiatives to stabilize energy markets.
- Ongoing uncertainty remains due to the continuing conflict in the Middle East and the S&P 500 dipping below a critical average.
Bitcoin and the broader crypto market experienced a significant price recovery on Friday following the announcement of collaborative efforts by major economies to enhance oil supplies through the now-affected Strait of Hormuz.
BTC, the leading cryptocurrency, rose to $70,800, increasing by over 1% on the day, continuing its recovery from overnight lows below $68,900, according to data from CoinDesk. Other prominent cryptocurrencies, such as ether (ETH), XRP (XRP), and solana (SOL), recorded smaller increases of less than 1%, trailing behind bitcoin.
West Texas Intermediate (WTI) crude experienced a decline of nearly 2% to $93.80, with similar losses observed in Brent, after the leaders of Britain, France, Germany, Italy, the Netherlands, and Japan announced steps to stabilize energy markets and collaborate on ensuring safe navigation through the Strait of Hormuz. A joint statement released by the office of U.K. Prime Minister Keir Starmer condemned the attacks carried out by Iran and called for an immediate cessation of its actions.
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On Thursday, U.S. Treasury Secretary Scott Bessent indicated that the U.S. might soon lift sanctions on Iranian oil tankers and could release crude from its Strategic Petroleum Reserve.
As the Federal Reserve voiced increased uncertainty regarding growth and inflation projections earlier this week, traders have reduced their expectations for Fed rate cuts. This situation has left both crypto and traditional risk assets largely vulnerable to fluctuations in oil prices.
The recent drop in oil, while favorable, does not eliminate the uncertainty, as military tensions in the Middle East persist. WTI remains close to recent support at $92.00, still considerably above pre-war levels.
"Currently, WTI crude continues to sustain what seems to be a progressively significant support level. This level corresponds well with previous highs and the short-term trend. As long as oil maintains that support and the trend continues upwards, it is likely to retain a bullish bias," Mott Capital Management stated in an email to its subscribers.
The company further noted that positioning within the oil options market indicates that higher levels could be achievable.
Another market that bitcoin traders may want to monitor is the S&P 500, Wall Street’s key equity index.
The index closed below its crucial 200-day simple moving average (SMA) on Thursday – the first occurrence of this since May of the previous year – indicating a bearish shift in momentum. A possible increase in risk aversion in stocks could extend to the crypto market and broader financial sectors.
