Bitcoin (BTC) is trying to stabilize itself after a shaky start to the week. After briefly falling towards the key $70,000 support level on Sunday, BTC has since recovered and is now trading above $72,000 on Monday.
However, the next step may depend less on internal crypto dynamics and more on the escalating geopolitical backdrop of tensions between the United States and Iran, and the events that will unfold in the coming days.
$100,000 Bitcoin by the end of the year
In a new reportsays market analyst Sam Daodu that Bitcoin’s direction is closely tied to how the conflict unfolds. Rather than pointing to a single likely outcome, Daodu outlines three scenarios, each with a different implication for oil prices, investor sentiment, and ultimately BTC price action.
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In Daodu’s bullish scenario, a full peace deal would change the outlook for both geopolitics and commodities. He suggests that oil prices would retreat to pre-war levels, roughly between $65 and $70 a barrel.
Daodu says if that happens, Bitcoin could soar towards $100,000 by the end of the year, which would translate into a 39% price increase from current trading levels.
April 15 Agreement expectations
The base case is more cautious and revolves around what could happen around April 15. Daodu believes that if the talks scheduled for that period lead to a new agreement, oil prices could fall back below $95, similar to what happened after the first ceasefire was announced last week.
Daodu also points to a specific positioning factor: there are currently reportedly about $6 billion worth of short positions between $72,200 and $73,500. If oil prices fall quickly and risk sentiment improves quickly, these short positions could come to a halt, creating a squeeze. That could help Bitcoin rise between $75,000 and $80,000.
Bear path for BTC
The bearish scenario focuses on the failure of the ceasefire – either because it disintegrates completely or because it expires without a workable outcome.
Daodu notes that the two-week ceasefire is already under pressure. Now that talks have collapsed and a blockade has been announced, the deal has been described as “hanging by a thread.”
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If negotiations fail and oil prices rise above $110 to $120, Daodu says Bitcoin will likely lose the $70,000 support level. From there, the downward path could accelerate, with BTC possibly sliding towards $65,000. If the crisis continues, he adds that prices could fall further towards $55,000 to $60,000.
Even with these three paths laid out, Daodu’s conclusion is that the basic prediction is the most realistic outcome at this time. By his assessment, Bitcoin will likely remain within range until the next round of talks produces something tangible.
Featured image from OpenArt, chart from TradingView.com