Two weeks into the Middle East war, Bitcoin is higher than it was when the war began.
The largest cryptocurrency was trading at $71,000 on Saturday morning, down 0.7% over the past 24 hours after the US bombed a military target on Kharg Island, Iran’s main oil export facility.
The reversal from Friday’s high of $73,838 was sharp but subdued. Bitcoin returned 3.5% and stopped on Kharg’s headline. A month ago, a similar price increase would have caused an even bigger decline.
Weekly numbers tell a story of resilience. Bitcoin gained 4.2% in 7 days. Ether rose 5.5% to $2,090. Dogecoin added 5%. Solana rose 4.2% to $88. BNB rose 4.5% to $655. Every major is blue this week, even though the war is escalating rather than easing.
Markets are adapting to conflicts in real time. In the early days of the war, no one could assess tail risks, so every headline made a big splash. Traders now have the framework to bounce back from a strike, oil spike or Bitcoin crash.
This pattern has repeated itself so many times that the impulse to reflexively sell headlines has faded. However, the $73,000-$74,000 resistance level still holds and has now rejected Bitcoin for the fourth time in two weeks.
President Trump’s language regarding Kharg Island has added a new variable to the market.
In a post on Truth Social late Friday, he said he would preserve oil infrastructure “for common sense reasons” but would “reconsider immediately” if Iran continues to block the Strait of Hormuz.
Iran countered that attacks on energy infrastructure would prompt retaliatory attacks on U.S.-affiliated facilities in the region. This is a conditional escalation threat that did not exist 48 hours ago. Targeting oil infrastructure would dramatically worsen what the IEA is already calling the largest supply disruption in history.
Meanwhile, $371 million in liquidations over the past 24 hours reflects the interactive nature of Friday’s session. Short liquidations outpaced longs by $207 million versus $163 million. This means that the initial surge to $73,800 weighed on the bears before the Karg headline weighed on the newly entered longs.
All eyes now turn to the March 17-18 Fed meeting. With oil prices above $100, the largest energy supply disruption in history, and a war entering its third week with no resolution, claims of stagflation are becoming harder to dismiss.
CME FedWatch still has over 95% probability of pricing in a 3.5% to 3.75% hold, but the dot plot and Powell’s press conference will likely be more important than the decision itself. Any sign that rate hikes are back on the table would be a huge blow to risk assets, including the crypto market, which has spent five months pricing in a rate hike not coming.
