(Bloomberg) — Bitcoin (BTC-USD) climbed to the higher bound of its recent trading range before the largest cryptocurrency pared its gain as turmoil in the Middle East continued to whipsaw global markets.
The digital currency – promoted as alternative to the conventional financial system since its inception more than 15 year ago – increased as much as 5.3% to almost $74,000 before cutting that increase by about half. It has traded in a rough range of around $75,000 to $60,000 since early February.
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The Iran conflict, which has disrupted trade and fueled inflation concerns, has driven Bitcoin’s sharp price swings. The token is up more than 8% since the fighting began, with some traders touting it as a hedge against rising prices.
“It appears that Bitcoin is beginning to attract attention as a safe-haven asset, rising amid volatility in financial markets,” said Alex Kuptsikevich, chief market analyst at FxPro. “The bulls are clearly trying to stir up the market to trigger a new short squeeze during the weekend, a period of reduced volatility.”
The moves come as the latest statements from President Donald Trump and Iranian leader Mojtaba Khamenei indicate there is little sign of the conflict easing, a war that is disrupting energy flows and jolting global markets. Iran has signaled it intends to keep the Strait of Hormuz effectively closed, putting investors on high alert for the risk of further escalation.
“Bitcoin has shown notable resilience, rebounding above $70,000 after briefly dipping below $63,000 during the initial risk unwind on Iran war,” said Cici Lu McCalman, principal consultant and founder of Venn Link Partners. “While the recovery is encouraging, price action still looks more like stabilization than a full confidence to risk-on positioning.”
In recent weeks, money has been returning to Bitcoin, after months of selling pushed it to roughly half the all-time high above $126,000 it reached in October. US-listed spot-Bitcoin exchange-traded funds are now on track for a third consecutive week of net inflows, the longest stretch since July. The funds have attracted more than $1.6 billion in the past month.
“We’re starting to see early signs of stabilization in ETF flows, which could be one source of renewed demand,” said Brett Munster, a portfolio manager at Blockforce Capital, adding that the majority of the drawdown appears to be behind us, and a potential turnaround could come about mid-year.