Analyst: Traders are itching for a reason to start buying bitcoin again
Investors are clinging to any bit of good news amid the conflict in the Middle East.
Bitcoin is holding steady despite fading optimism about war de-escalation, which is sending oil prices up once again and gold down. The asset is sitting in the $70,000 to $71,000 range on Tuesday morning after yesterday’s bump.
“The market appears to be transitioning into a consolidation phase, with softer activity, defensive positioning, and tentative signs of stabilization emerging across both spot and derivatives segments,” Glassnode analysts said in a report.
They added that in derivatives, open interest dropped, while funding rates flipped positive, “suggesting modest leverage reduction alongside some rebuilding of long exposure, though conviction remains measured.”
As for options markets, they said that open interest is unchanged and volatility expectations are subdued.
“A rise in 25-delta skew points to growing demand for downside protection, reflecting cautious sentiment among traders,” they said.
Alexander S. Blume, founder and CEO of Two Prime, told Sherwood News that despite uncertainty in crypto markets and geopolitical turmoil, bitcoin has remained relatively resilient.
“We have seen a recovery in funding rates and skew that suggests institutions are positioning with less downside protection, perhaps suggesting an upside surprise is in the works,” Blume said. “It seems that expectations are so negative for the Iran conflict that most news will resolve positively, buoying risk assets and reducing inflation fears.”
Macro and geopolitical events will continue to shape bitcoin’s trajectory in the short term, with investors clinging to any bit of good news.
“Two Prime is in market-neutral trades, betting on an increase in funding and futures rates in the weeks and months to come,” Blume added.
Blume said that as bitcoin has fluctuated between $67,000 and $74,000 for weeks, “a breakout in either direction would be where real movement starts to happen.”
Danny Nelson, a research analyst at Bitwise, told Sherwood that Monday’s move wasn’t a rally for bitcoin, but rather a reversal, “an undoing of the losses that Trump’s escalatory threats had triggered.”
Nelson said that traders are itching for a reason to start buying bitcoin again, and as soon as President Trump hedged, they found one.
“But it’s telling that this move didn’t go beyond a reversal. We’re still underwater relative to bitcoin’s perch of $74,000 just six days ago. Trump moved his deadline until Friday. Until then (and probably for much longer) geopolitical events will be the main driver of price,” Nelson said.
Meanwhile, Dean Chen, a Bitunix analyst, is watching the $75,000 level, which remains the primary liquidity zone overhead, with $72,200 acting as a short-term battleground.
“On the downside, $69,300 serves as the first support; a break below could lead to a retest of the $67,800–$67,500 liquidity range. Overall, price continues to oscillate between upside liquidity inducement and downside absorption,” Chen said.
