Bitcoin Surpasses $70,000 Amidst Oil Price Plunge: The Politics and Market Dynamics Behind It

On Monday, Bitcoin's price decisively broke through the $70,000 mark, while international oil prices experienced a historic single-day collapse. WTI crude plummeted from $119 per barrel to $85, a $34 drop in a single day, marking one of the most dramatic intraday reversals in recent years. This sharp fluctuation stemmed from U.S. President Trump's declaration at a press conference held at the Doral resort in Florida that military action against Iran was "largely complete." As soon as this statement was made, global markets reacted swiftly: risk assets generally rebounded, while the geopolitical premium embedded in oil prices evaporated within hours. However, just hours after Trump's remarks, the U.S. Department of Defense posted a starkly different statement on social platform X: "We have only just begun to fight" and "No Mercy," sparking widespread market skepticism about the true state of affairs. Previously, affected by the Iranian conflict, shipping in the Strait of Hormuz was disrupted, and approximately 60% of Iraq's oil production capacity was forced to shut down, pushing oil prices to a high of $119 on Sunday night. However, as Trump's "war is over" rhetoric released short-term sentiment, the market quickly corrected expectations. WTI crude completed a reversal within 12 hours, and Brent crude, although closing at $98.96, remained above the psychological threshold of $100. The crypto market simultaneously experienced a significant rebound. In the past 24 hours, a total of $340 million in positions were liquidated across the network, of which $184 million were short positions being liquidated. Bitcoin, as the leading asset, drove the entire crypto ecosystem higher. Related listed companies also performed well: Circle (CRCL) rose 10%, MicroStrategy (MSTR) rose 5%, and Coinbase (COIN) rose 2%. Bitcoin futures open interest increased by 3.11% to $44.91 billion. U.S. stocks also benefited from the easing of risk aversion, with the S&P 500 Index rising 0.83% to 6795.99 points, the Nasdaq Composite Index climbing 1.38%, and the Dow Jones Industrial Average rising 239 points.

Bitcoin's 7-day price chart, clearly showing the key point of breaking through $70,000. Source: CoinGecko Despite the price surge, market sentiment remains cautious. According to Alternative.me data, the Cryptocurrency Fear & Greed Index is only 13, in the "Extreme Fear" range, reflecting investors' high degree of uncertainty about future trends. Analysts have differing views on this. Some believe that if Trump continues to intervene in Iranian affairs, it will exacerbate fiscal pressure, which may prompt the Federal Reserve to adopt a more relaxed monetary policy, thereby further pushing up the prices of assets such as Bitcoin. Some analysts still maintain a Bitcoin target price of $250,000 by 2026. However, there are also warnings that geopolitical risks have not truly been eliminated—the Strait of Hormuz remains a high-risk area, Iraq's production capacity has not yet recovered, and Kuwait and the United Arab Emirates have proactively reduced production due to oil tanker transportation paralysis. The upcoming February CPI data (to be released on March 12) will be the next key variable. If the data indicates that inflationary pressure pushed up by oil prices has not subsided, Bitcoin may retrace to the $65,000 support level; if inflation is moderate, the market may continue to move towards the $74,000 target.

The Cryptocurrency Fear & Greed Index remains in the "Extreme Fear" range, reflecting that market sentiment has not fully recovered. Source: Alternative.me