Bitcoin dips, oil jumps 10% amid West Asia Crisis as Trump says ‘We have all the cards’

Oil prices surged 10%, exerting pressure on Bitcoin after President Donald Trump’s mixed signals on the West Asia crisis. 

Trump said the war could end in the next “two to three weeks,” but added, 

This was contrary to some expectations, as some quarters were hoping for an end-of-war announcement. 

Following the remarks, oil prices rose from $97 to $108, suggesting traders expected further escalations. 

But performance across markets was mixed. On the 1st of April, the U.S. equity market closed higher, but BTC stalled at $69K. It extended the losses on the 2nd of April to $66K, marking a 4% drop. 

What’s next for BTC?

The biggest portion of the BTC pullback happened on Thursday before the U.S. market opened. This meant risk sentiment may sour further, especially if U.S. ground troops invade Iran as speculated. 

In fact, prediction site Polymarket was pricing a 62% chance of a U.S. ground invasion in April. 

If such an outcome further puts the energy market in distress, inflation fears could spike again. For BTC and crypto, however, the potential impact remains unclear given past correlation to oil. 

During the West Asia crisis in March, BTC posted mixed performance. Sometimes, it rallied alongside oil, like during the first half of March. In late March, however, the oil price surge triggered BTC to dip lower.

Additionally, the U.S. tax season is here and will end on the 15th of April. Typically, this period reduces dollar liquidity, which tends to temporarily keep BTC under pressure before a potential relief bounce in the second half of April. 

Market caution persists

Interestingly, the Options market, where experienced traders and institutional investors hedge their bets, also reinforced caution. 

This was illustrated by a key metric, 25-Delta Risk Reversal (25RR), which has turned negative for all April Option expiries. In simple terms, it meant more demand for puts (hedging against downside risk) than calls (bullish bets). 

Commenting on the market positioning, Bitfinex analysts said there was a ‘thin conviction,’ adding that, 

At press time, BTC traded at $66.2K and was still within the $60K-$70K price range amid rising sell pressure. 

Final Summary

• BTC fell 4% to $66K following Trump’s mixed messaging on the Iran war. 
• The options market expressed caution, with Polymarket pricing a 62% chance of U.S. ground troops invading Iran.