Bitcoin Held Its Ground as Oil Prices Plunged 5%! Asian Stock Markets Also Cheered

▲ Bitcoin, Oil Prices ©

Bitcoin (BTC) managed to hold the $77,000 level, bolstered by a sharp drop in international oil prices and a rebound in Asian stock markets. However, market caution remains high due to continued outflows from spot ETFs.

According to investment media outlet FXStreet on May 25 (local time), Bitcoin traded around $77,200 today, staying above its 50-day simple moving average of approximately $76,940. The market interprets the stabilization above key moving averages as a short-term bullish signal. XRP (Ripple), Solana (SOL), and Ethereum (ETH) also saw slight rebounds but continued to trade below their respective 50-day moving averages, showing relatively weaker performance compared to Bitcoin.

The market rebound was underpinned by a sharp drop in international oil prices. West Texas Intermediate (WTI) crude oil futures prices fell by over 5%, pushing them down to around $91 per barrel. Reports that negotiations for reopening the Strait of Hormuz were nearing completion had an impact. Consequently, Japan's Nikkei index rose by approximately 3% during intraday trading, and India's Nifty index climbed by over 1%. Australia's S&P/ASX200 also showed an upward trend.

The media reported that expectations for a peace agreement between the United States and Iran were partially restoring risk-on sentiment. U.S. Secretary of State Marco Rubio stated that “a fairly robust proposal is on the table,” mentioning the possibility of an agreement to end the war between the two countries as early as Monday. However, Iran indicated that uncertainties still remain on key issues, preventing the market from fully shifting to a risk-on phase.

Institutional fund flows were also identified as a burden. Over the past two weeks, more than $2 billion has net flowed out of Bitcoin spot ETFs. Timothy Misir, Head of BRN Research, analyzed, “Whether ETF outflows slow down is a key variable. If stablecoin liquidity and long-term holders hold firm, some institutional selling can be absorbed, but if ETF redemptions continue, the sustainability of the rebound could weaken.”

Indian-based exchange CoinSwitch also assessed that the finalization of the US-Iran peace agreement is a key condition for further upside. The exchange also diagnosed that the recent net inflow of 18,528 BTC into centralized exchanges could be a signal of potential selling pressure. The market is currently seeing Bitcoin searching for its short-term direction amidst the clash between expectations of geopolitical risk easing and institutional fund outflows.

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