Bitcoin rose to a high of $71.7K on Tuesday, March 10, after the International Energy Agency (IEA) planned to release record oil from its reserves.
The move was aimed at stabilizing energy markets amid the ongoing Strait of Hormuz crisis.
The update caused oil prices to fall sharply by 21%, from over $100 per barrel to a low of $85. Also the Wall Street Journal reported that President Donald Trump’s advisers were pushing for an end to the war in Iran to avoid political backlash.
Collectively, these bullish updates caused oil prices to fall Bitcoin [BTC] rose to $71.7K, underscoring the renewed sense of risk over the stabilization of energy markets.
Too Early for Bitcoin FOMO?
Santiment actually noted that when BTC crossed the $70,000 mark, ‘FOMO’ spiked as traders got greedy amid bullish updates.
However, previous FOMO peaks have also been characterized by short-term pullbacks, especially if they were caused by long-term contraction.
For example, a similar FOMO spike around March 4 sent BTC soaring to $73,000 before falling sharply to $65,000.
If past trends repeat, BTC could retreat to $65K, especially if oil prices rise.
Yet despite ongoing tensions in the Middle East, there has been remarkable resilience. The panic sell-off and daily realized losses had fallen sharply from $3 billion to $370 million, Bitfinex analysts noted.
The analysts added Should ETF inflows improve this week, BTC could extend its recovery. Otherwise, the $65K-$72K price range could shrink further. At the time of writing, BTC was trading at $69.4K, slightly lower than Tuesday’s peak.
Option insights suggest…
Still, the options market painted a broader picture of optimism, perhaps reflecting plans to release oil reserves.
According to Jeff Parkadvisor at asset manager Bitwise, the five best traded IBIT options from BlackRock were calls (bullish bets) based on volume and notional value.
This meant that institutions were betting on a long-term recovery of BTC in the short term. However, Deribit facts showed that options traders on the platform were only pricing in a 25% chance that BTC would retest $75,000 by the end of March.
The difference between institutional bullish bets and the low odds of recovering $75,000 could be resolved by developments in the Middle East and energy markets.
Analysts expect the Xi Jinping-Donald Trump meetingscheduled for the end of March, could provide more clues about the situation in the Middle East.
However, ahead of the latest Xi-Trump summit, a preliminary discussion between China and top US officials is taking place this weekend (March 14-15) in Paris.
For analyst Garret BullishA negative outcome from the weekend meeting would complicate the situation in the Strait of Hormuz, impact oil prices and, by extension, impact BTC.
Final summary
- Bitcoin FOMO peaked earlier this week when the price rose above $70,000 amid plans by the IEA to release oil reserves to stabilize energy markets.
- Despite strong demand for calls (bullish bets), traders estimate only a 25% chance that BTC would recover $75,000 in March.