Bitcoin treads water as war risk rises and rate cuts look distant: analysts

Bitcoin prices have been oscillating in a narrow range around $66,000 as traders balance rising geopolitical risk, particularly related to Iran, against a cautious macro backdrop where interest rate cuts appear distant. Initial dips due to Middle East headlines triggered liquidations, but the deleveraging was contained, suggesting reduced positioning beforehand. Derivatives desks noted a 'fade the news' pattern, with assets like U.S. equities and Bitcoin recovering early losses, assuming limited economic fallout unless energy supplies are severely disrupted. However, macro caution persists; analysts note that the Federal Reserve's slower pace in easing policy keeps the opportunity cost of holding non-yielding assets high. Furthermore, historical precedent suggests wars are inflationary, which could complicate the Fed's rate outlook. Consequently, sentiment remains low, with the Crypto Fear & Greed Index near 'Extreme Fear,' and BTC is on track for its worst Q1 performance since 2014.

(Source：The Block)