Bitcoin and the broader crypto market saw a notable price increase on Friday after major economies announced joint efforts to increase oil supplies through the now-disturbed Strait of Hormuz.
BTC, the largest cryptocurrency, jumped to $70,800, up more than 1% on the day, extending its recovery from overnight lows below $68,900, according to CoinDesk data. Other major coins, including ether (ETH), XRP (XRP), and solana (SOL), saw smaller gains of less than 1%, lagging behind bitcoin.
West Texas Intermediate (WTI) crude fell nearly 2% to $93.80, alongside similar losses in Brent, after Britain, France, Germany, Italy, the Netherlands and Japan said they would take steps to stabilize energy markets and join a cooperative effort to ensure safe passage through the Strait of Hormuz. In a joint statement issued by British Prime Minister Keir Starmer’s office, leaders of these nations condemned the attacks by Iran and called on the country to immediately halt its actions.
On Thursday, US Treasury Secretary Scott Bessent said the US may soon lift sanctions on Iranian oil tankers and could release crude from its strategic oil reserve.
As the Federal Reserve expressed increased uncertainty about the growth and inflation outlook earlier this week, traders have scaled back expectations for Fed rate cuts. That has left crypto and traditional risk assets largely exposed to oil price fluctuations.
The recent drop in oil, while positive, does not end the uncertainty as the military conflict in the Middle East continues. WTI remains close to recent support at $92.00, still significantly above pre-war valuations.
“Currently, WTI crude oil continues to hold what appears to be an increasingly important area of support. That level is in good agreement with previous highs and the short-term trend. As long as oil holds that support and the trend continues higher, it will likely maintain an upward bias,” Mott Capital Management said in an email to its subscribers.
The firm added that positioning in the oil options market suggests higher levels are possible.
Another market that bitcoin traders may want to watch is the S&P 500, Wall Street’s benchmark stock index.
The index closed below its pivotal 200-day simple moving average (SMA) on Thursday – the first such instance since May last year – signaling a bearish shift in momentum. A potential strengthening of risk aversion in equities could spill over into crypto and the wider financial markets.
