Bitcoin (BTC) is trying to steady itself after a shaky start to the week. After briefly falling towards the key support level of $70,000 on Sunday, Bitcoin has since rebounded and is now trading above $72,000 on Monday.
However, the next step may depend less on internal cryptocurrency dynamics and more on the rising geopolitical backdrop of US-Iran tensions, and events unfolding in the coming days.
$100,000 worth of Bitcoin by the end of the year
In new a reportMarket analyst Sam Dawodu says that Bitcoin’s trend is closely related to how the conflict develops. Instead of pointing to one possible outcome, Dawodu presents three scenarios, each with a different impact on oil prices, investor sentiment, and ultimately Bitcoin price movement.
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In Dawodu’s optimistic scenario, a full peace agreement would change the outlook for both geopolitics and commodities. He indicates that oil prices will decline towards pre-war levels, approximately $65 to $70 per barrel.
If that happens, Dawudu says, Bitcoin could rise toward $100,000 by the end of the year, which would translate into a 39% price increase from current trading levels.
Expectations of the April 15 agreement
The base case is more cautious and revolves around what could happen around April 15. Dawodu believes that if the talks scheduled for that period lead to a new agreement, oil prices may fall below $95 again, similar to what happened after the first ceasefire was announced last week.
Dawodu also points out the specific positioning factor: There are reportedly about $6 billion in short positions between $72,200 and $73,500 right now. If oil prices fall quickly and risk appetite improves quickly, those short positions could unwind, leading to a squeeze. This could help push Bitcoin higher between $75,000 to $80,000.
Bear track for BTC
The bearish scenario revolves around the failure of the ceasefire – either because it disintegrates completely or because it ends without a practical outcome.
Dawodu points out that the two-week ceasefire is already under pressure. With the collapse of the talks and the announcement of the blockade, the agreement is described as “hanging by a thread.”
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If negotiations fail and oil prices rise above $110 to $120, Dawodu says Bitcoin will likely lose the $70,000 support level. From there, the downward trajectory could accelerate, with Bitcoin potentially sliding toward $65,000. He adds that if the crisis continues, prices may fall further, towards $55,000 to $60,000.
Even given these three paths, Dawodu’s conclusion is that the baseline prediction is the most realistic outcome at the moment. In his assessment, Bitcoin will likely remain range-bound until the next round of talks produces something concrete.
Featured image from OpenArt, chart from TradingView.com
