Oil Prices Stabilize, Supporting Risk Asset Rally! Wintermute: Bitcoin Rebounds Above $70,000 Reflecting Cooling Geopolitical Risk Premium

Cryptocurrency market maker Wintermute states that recently Bitcoin has regained the $70,000 level, driven by a key factor: the geopolitical risk premium in the oil market has rapidly declined after the Middle East tensions temporarily eased.

As Brent crude oil prices sharply cooled from wartime highs, concerns over inflation, supply disruptions, and global growth pressures eased simultaneously, leading funds to flow back into risk assets including Bitcoin. Wintermute directly attributes this to Trump’s move to pause further strikes, which reduced the geopolitical risk premium in oil, causing Brent prices to fall and pushing Bitcoin back above $70,000.

Wintermute: Falling oil prices are a major macro signal for Bitcoin’s rebound
According to Wintermute’s market observations, recent trading logic is not solely driven by internal crypto market news but is more directly influenced by macro and geopolitical factors. Their core view is that when the market perceives no further escalation in Middle East conflicts and energy supply risks are temporarily under control, the previously inflated oil prices begin to retreat, and investor sentiment toward high-risk assets improves, leading to a noticeable rebound in Bitcoin.

This assessment aligns with recent global market performance. Reuters reports that after the U.S. proposed a ceasefire and de-escalation plan with Iran, markets began to bet on the easing of Middle East supply disruption risks. Brent crude futures for May retreated after the news, fluctuating around the flat line. As of Taiwan time on the 25th, it was at $96.01 per barrel, nearly unchanged. U.S. West Texas Intermediate (WTI) futures rose 0.4% to $88.49 per barrel.

In fact, oil prices had previously been a core variable suppressing market sentiment. Reuters reported on March 19 that Brent surged to $119.13 per barrel intraday, and WTI broke $100, mainly due to Iran’s increased attacks on Middle Eastern energy facilities, heightening fears of supply disruptions. Market concerns centered on prolonged blockage of the Strait of Hormuz, which could further spike energy prices and negatively impact global risk assets.

However, the situation changed afterward. The U.S. signaled “constructive dialogue” with Iran and proposed to pause some strikes, prompting markets to quickly revise their worst-case expectations. Both AP and Reuters noted that Brent retreated from near $120 to around $100, with markets beginning to reprice energy supply risks. For investors, the stabilization of oil prices not only signals reduced energy market pressure but also temporarily lowers the risk of runaway inflation, improving risk asset allocations such as stocks and cryptocurrencies.

Bitcoin back above $70,000 reflects its status as a “high beta risk asset”
In this rebound, Bitcoin’s performance again highlights its nature as a high beta risk asset. According to Binance data, Bitcoin is currently around $70,669, with a 24-hour range between $68,920.69 and $71,371.30, indicating high volatility even after re-establishing above $70,000.

This aligns with Wintermute’s analysis. When oil prices surged due to escalating conflicts, Bitcoin previously dipped below $70,000. Conversely, when oil prices fell and stocks and other risk assets rebounded, Bitcoin quickly regained ground. After Trump announced a pause on further strikes against Iran, Bitcoin briefly returned to $70,000, with the overall crypto market cap increasing by about $60 billion in one day, reflecting a clear short-term capital inflow.

From asset pricing logic, Wintermute’s observation highlights a key recent market trend:
Bitcoin’s short-term performance is increasingly driven by macro risk sentiment rather than solely by crypto-specific narratives.

Crude oil, as a direct indicator of global inflation expectations and geopolitical risks, surges typically signal a shift toward safe-haven, defensive, and deleveraging behaviors. Conversely, falling oil prices indicate that worst-case supply shocks are being revised, giving risk assets room to breathe. Along with oil price declines, Asian and European/American stock markets generally rose, indicating this rebound is not unique to crypto but part of a broader risk appetite recovery.

Key outlook: If oil prices rise again, Bitcoin could face renewed pressure
“The macroeconomic ceiling has already changed. The development over the next five days (this week) will determine the market direction,” Wintermute states in its market analysis report.

The report notes that Trump’s five-day pause on actions against Iran’s energy infrastructure temporarily reduces geopolitical risk premiums in the oil market and readjusts positions expiring on March 27. If Brent remains around $100 and diplomatic efforts continue, concerns over energy supply disruptions and inflation should ease. This could restore some of the rate cut expectations wiped out last week, removing macroeconomic headwinds that have suppressed Bitcoin’s rise since the conflict escalated.

Positive news regarding the Strait of Hormuz shipping or signs of cooperation from Iran could push Bitcoin toward resistance zones of $74,000 to $76,000, which have previously faced resistance twice. As Bitcoin reclaims the $70,000 level and options market pain points cluster around that level, favorable news could continue to push prices higher before options expiry.

If negotiations break down or shipping restrictions persist, oil risk premiums could rise again, keeping inflation fears high, delaying rate cut expectations, and causing markets to revert to risk-off sentiment. Under such circumstances, Bitcoin might test support levels around $60,000.

“Continued easing of capital flows through the Strait of Hormuz and normalization will eliminate inflation pressures, give the Fed more flexibility, and improve the macro environment for risk assets. If institutional buying continues on dips, Bitcoin could reach $80,000,” Wintermute concludes in its market analysis report.