bitcoin It adds to overnight gains in early US trading on Friday, and continues to show strong relative price action after many months of poor performance for assets such as stocks and precious metals.
Priced at $73,800, bitcoin is up nearly 5% in the past 24 hours, with most of those gains coming after U.S. Treasury Secretary Scott Bessent said late Thursday that the Trump administration is taking concrete steps to try to limit the rise in oil prices.
Bitcoin is now up about 11% since the war with Iran broke out, outperforming US stock indices and gold, both of which have lost ground since the bombs started dropping about two weeks ago.
WTI oil is trading at $94.50 a barrel on Friday, down from Thursday’s high of nearly $98. US stocks are posting gains of around 0.5%.
Oil increases the risk of stagflation
The recent rise in oil prices is putting direct pressure on household budgets and, if sustained, could weaken consumer spending and slow economic growth, according to Olu Sonola, head of U.S. economics at Fitch Ratings.
“Yes, the broader economy is still expected to grow on trend, but that forecast looks increasingly fragile as downside risks accumulate… The Fed can shrug off pockets of weakening growth, but resurgent inflation severely limits its room for maneuver, leaving policy potentially stranded for months,” he wrote in a note.
Relief bounce
After a period of some of the worst sentiment in Bitcoin history, it is perhaps not too surprising that there have been some modest gains of late.
Perpetual futures traders’ funding positioning has been negative for the longest period since late 2022, noted Vetle Lunde, analyst at K33 Research. This means that traders who are short bitcoin are paying out long positions to keep their trades open, resulting in a negative funding rate. Late 2022, of course, coincided with the aftermath of the FTX crash, when BTC was trading around $16,000 versus $69,000 a year earlier.
The 30-day average funding rate has been negative for 14 consecutive days, the longest rate since December 2022, Lunde noted. These negative streaks coincided with the lowest levels of local prices in the last seven years, he added.
Meanwhile, bitcoin open interest in perpetual and dated futures has risen 9% in the last 24 hours to around 700,000 BTC, the highest level since February 6. Add it all up, and that creates the conditions for a brief contraction.
friday profit
The day isn’t over yet, but this would be Friday’s first gain since the conflict in the Middle East began on February 27. That could suggest a less volatile weekend for cryptocurrencies, which have taken to falling on Saturdays and Sundays in recent weeks.
March is also shaping up to be a turning point for bitcoin. The asset is up approximately 8% so far this month. Again, it’s early, but a breakout in March would break BTC’s five-month losing streak.
