Is Bitcoin Price Headed to a Crash as Crude Oil Jumps?

Key Insights

• Bitcoin price has crashed to an important support level this week.
• Crude oil continued rising after Ukraine launched against Russian refineries.
• The coin has formed a rising wedge pattern pointing to further downside.

Bitcoin price traded sideways this week as buyers defended support near the 50-day moving average. The consolidation followed renewed geopolitical tensions and continued weakness in spot Bitcoin ETF flows.

Brent crude oil also moved higher after Ukraine reportedly launched another drone strike targeting Russian refinery infrastructure. At the same time, uncertainty surrounding negotiations between the United States and Iran continued supporting energy prices.

Rising Oil Prices Add Pressure on Bitcoin

A potential risk facing the Bitcoin price is the elevated crude oil prices. Brent, the global benchmark, jumped to $105.6 on Friday after Ukraine launched a drone attack against a major Russian refinery. This happened a few days after it launched a larger-scale attack on key infrastructure.

Ukraine hopes that bombing Russia’s oil refineries will have an impact on the amount of oil that the country sells. That will, in turn, lead to lower revenues, which will affect how Russia is funding the war.

The bombing came as concerns about the US-Iran war remained. In a statement this week, President Donald Trump said that he was prepared to launch an attack against Iran. He paused after requests from Gulf allies, who believe that Iran would have responded by launching attacks against their energy infrastructure.

Trump moved to calm the market, noting that the two sides were in advanced talks and were nearing a deal. Still, there are concerns on whether the two sides can reach an agreement as they remain further apart. For example, Iran has rejected any talk of sending its enriched uranium to the US. It has also maintained that it will continue controlling the Strait of Hormuz.

Therefore, there is a risk that the two sides will go back to war, which is risky for the energy markets. Such a move would be risky for the Bitcoin price because of the impact on inflation. Soaring prices will drive inflation higher, making it hard for the Fed to cut rates.

Spot BTC ETF Outflows are Soaring

The rising geopolitical risks likely explain why American investors are dumping their BTC ETF holdings. Data shows that these investors dumped ETFs worth over $100 million on Thursday, continuing a trend that started on May 15.

These ETFs have now shed over $898 million this month, ending a two-month streak of inflows. They added $1.9 billion last month after having $1.32 billion in inflows in March this year.

Another potential reason why investors are selling their holdings is to take profits as the Bitcoin price has jumped by over $17,000 from its lowest point this year. It is common for investors to book profits after such a strong rally.

Also, there are signs that investors are moving from alternative assets to the stock market. Data shows that stock market ETFs have added billions of dollars worth of assets in the past few months. These inflows explain why the US stock market is trading at a record high.

Bitcoin Price Prediction: Technical Analysis

Bitcoin also remains below the 50-week moving average, suggesting buyers have struggled to regain stronger momentum.

If selling pressure accelerates again, traders may focus on the $70,000 region as the next major support area. A breakdown below that level could expose the market to deeper downside toward $60,000.

However, a recovery back above the 50-week moving average would weaken the current bearish structure and improve the short-term outlook.

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