bitcoin and the broader crypto market saw a notable price rally on Friday after major economies announced joint efforts to boost oil supplies through the now-disturbed Strait of Hormuz.
BTC, the largest cryptocurrency, jumped to $70,800, up more than 1% on the day, extending its recovery from overnight lows below $68,900, according to data from CoinDesk. Other major coins, including ether (ETH), XRP (XRP), and solana (SOL), posted smaller gains of less than 1%, lagging behind bitcoin.
West Texas Intermediate (WTI) crude fell almost 2% to $93.80, along with similar losses in Brent, after Britain, France, Germany, Italy, the Netherlands and Japan said they would take steps to stabilize energy markets and join collaborative efforts to ensure safe passage through the Strait of Hormuz. In a joint statement issued by UK Prime Minister Keir Starmer’s office, the leaders of these nations condemned Iran’s attacks and urged it to stop its actions immediately.
On Thursday, US Treasury Secretary Scott Bessent said the US could soon lift sanctions on Iranian tankers and release crude from its Strategic Petroleum Reserve.
With the Federal Reserve expressing greater uncertainty about the outlook for growth and inflation earlier this week, traders have reduced expectations of rate cuts from the Federal Reserve. This has left traditional and crypto risk assets largely at the mercy of oil price swings.
The latest drop in oil, although positive, does not put an end to uncertainty, as the military conflict in the Middle East continues. WTI remains near recent support at $92.00, still significantly above pre-war valuations.
“For now, WTI crude oil continues to hold what appears to be an increasingly important support area. That level aligns well with previous highs and the near-term trend. As long as oil maintains that support and the trend continues up, it will likely maintain a bullish bias,” Mott Capital Management said in an email to subscribers.
The firm added that the positioning in the oil options market suggests that it is possible to reach higher levels.
Another market bitcoin traders may want to watch is the S&P 500, Wall Street’s benchmark stock index.
The index closed below its fundamental 200-day simple moving average (SMA) on Thursday (the first such case since May last year), indicating a bearish shift in momentum. A possible strengthening of risk aversion in stocks could extend to cryptocurrencies and financial markets in general.
