Bitcoin climbs back above $71,000 on Friday after a turbulent stretch that saw the cryptocurrency dip below $70,000 the previous day. According to CoinGecko data, the asset is trading at $70,547, roughly flat on the day, having reached an intraday peak of $71,261 in early Friday trading. The recovery follows a period of sharp volatility tied to rising energy prices and geopolitical instability in the Persian Gulf.
The immediate trigger for Thursday’s selloff was a surge in Brent crude oil prices to $119 per barrel, driven by attacks on energy facilities in the Persian Gulf region. The spike in oil prices contributed to more than $500 million in crypto liquidations across the market. The situation has drawn attention from senior policymakers, with U.S. Treasury Secretary Scott Bessent reportedly weighing potential responses, including lifting sanctions on Iranian oil cargoes already at sea and tapping the U.S. Strategic Petroleum Reserve.
At the center of the crisis is the Strait of Hormuz, a critical passage through which a significant share of the world’s energy supplies flow. Analysts have warned that an extended closure of the strait could push oil prices as high as $200 per barrel. Market participants are closely monitoring the situation for any signs of further disruption to global energy infrastructure.
The relationship between cryptocurrency prices and energy markets has grown more pronounced as institutional investors increasingly incorporate digital assets into broader risk portfolios. Analysts note that the correlation between crypto and oil price movements has strengthened in this environment. This dynamic means that developments in the Middle East now carry direct implications for digital asset valuations.
According to GSR research analyst Carlos Guzman, Bitcoin’s price movements are a secondary consequence of elevated energy costs. Higher energy prices could prompt the Federal Reserve to maintain elevated interest rates for a longer period, which Guzman describes as potentially negative for crypto overall. He notes that lower interest rates typically encourage investors to move capital into riskier asset classes, benefiting cryptocurrencies.
On prediction platform Myriad, users currently assign a 63% probability that oil’s next significant move will take it to $120 per barrel rather than falling back to $55. Bitcoin’s near-term outlook has also shifted, with predictors placing a 51% chance on the asset reaching $84,000 as its next major move, compared to $55,000 on the downside. That bullish sentiment has cooled from a high of 65% earlier in the week, reflecting growing uncertainty across both energy and crypto markets.
Originally reported by Decrypt.
