Analyst: Three Key Factors Behind Bitcoin's Price "Outperforming Stocks"

Gate News: Despite the ongoing Middle East Iran conflict, Bitcoin (BTC) prices remain relatively stable, currently around $71,000, down approximately 43% from the $126,000 peak in October last year. Rachael Lucas, an analyst at BTC Markets, noted that Bitcoin has shown resilience amid macro shocks, with prices rising about 7% this month, outperforming stocks, gold, and silver. However, its strength depends on three key factors.

First, geopolitical risks from the Iran war continue to impact the market. Paul Howard, senior executive at high-frequency market maker Wincent, said that the crypto market can absorb shocks, and short-term volatility offers trading opportunities. Oil prices have risen to $103 per barrel, increasing macro uncertainty.

Second, Federal Reserve policies are exerting pressure on Bitcoin. Lucas pointed out that although markets expect rate cuts, high oil prices are driving inflation, which may delay actual rate reductions. Fed Chair Jerome Powell’s term ends in May, and the unclear succession adds policy uncertainty. The short-term interest rate environment remains a significant obstacle to Bitcoin’s rise.

Third, institutional investor interest continues to support Bitcoin. Data from DefiLlama shows that since the outbreak of the war, investors have poured about $1.6 billion into Bitcoin ETFs. Lucas said that crypto assets account for less than 0.5% of wealth managed by U.S. advisors, indicating huge potential for future capital inflows. Meanwhile, traditional financial institutions are promoting digital ledger technology worldwide, further increasing Bitcoin’s appeal to institutional investors.

Analysts warn that if Bitcoin falls below $67,500, a short-term weakening trend could form, with $59,000 seen as a long-term key support level. Additionally, Polymarket predicts a 70% chance that Bitcoin will drop below $55,000 by 2026, and a 77% chance it will reach $80,000. Market participants should closely monitor the war’s progression, Federal Reserve decisions, and institutional fund flows to assess Bitcoin’s short- and medium-term trends.