Key takeaways
- Bitcoin trades below $64,000 as stalled US-Iran negotiations weaken demand for risk-sensitive assets.
- Rising oil prices are increasing inflation concerns and expectations of another Federal Reserve rate hike.
- US spot Bitcoin ETFs recorded $144.67 million in net outflows on Monday, ending a five-day inflow streak.
Bitcoin (BTC) is struggling below $64,000 at the time of writing on Tuesday as rising oil prices and uncertainty surrounding the US-Iran negotiations weigh on market sentiment.
Weakening institutional demand has added to the pressure. US spot Bitcoin exchange-traded funds recorded net outflows at the beginning of the week, ending a five-day run of positive flows.
The combination of geopolitical uncertainty, renewed inflation concerns and softer ETF demand is keeping investors cautious and limiting Bitcoin’s ability to recover.
US-Iran deadlock pushes oil prices higher
Negotiations between the United States and Iran over a potential peace agreement and the reopening of the Strait of Hormuz appear to have reached an impasse.
US President Donald Trump responded to Iran’s conditions for a peace agreement with additional demands on Monday, including compensation for people killed in wars, attacks and protests, according to Reuters.
The rhetorical escalation could complicate diplomatic efforts and delay the reopening of the Strait of Hormuz, a critical route for global energy shipments.
Concerns about prolonged disruption have pushed oil prices higher while pressuring risk-sensitive assets such as Bitcoin.
A sustained increase in energy prices could lift production and transportation costs, creating renewed inflationary pressure. Higher inflation could give the Federal Reserve more reason to maintain restrictive monetary policy or raise interest rates.
Expectations of another Federal Reserve rate increase have strengthened alongside the rally in oil prices.
The CME FedWatch Tool shows that market participants are pricing in a 51.3% probability of a 25-basis-point rate hike at the Fed’s September meeting. That figure has increased from 44.1% on Friday.
Higher interest rates generally reduce demand for speculative assets by increasing borrowing costs and making interest-bearing investments more attractive. As a result, rising rate-hike expectations could continue to limit Bitcoin’s upside.
However, expectations could shift again in response to incoming inflation, employment and economic-growth data.
Institutional demand for Bitcoin began the week on a weaker footing. US spot Bitcoin ETFs recorded $144.67 million in net outflows on Monday, according to SoSoValue. The withdrawal ended five consecutive trading days of net inflows.
ETF flows are closely watched because they provide insight into demand from institutional and traditional-market investors. Sustained inflows can support Bitcoin by increasing spot-market buying, while persistent outflows can add selling pressure.
Monday’s outflow does not necessarily establish a broader trend. However, additional withdrawals throughout the week could deepen Bitcoin’s correction and further weaken investor sentiment.
Bitcoin price remains below key moving averages
Bitcoin trades near $63,916 at the time of writing on Tuesday after falling 1.44% during the previous session.
The cryptocurrency remains below a cluster of important Exponential Moving Averages, maintaining its bearish near-term structure.
The 50-day EMA at $64,625 represents Bitcoin’s nearest resistance. Above that level, the 100-day EMA at $66,795 and the 200-day EMA at $72,045 create additional barriers.
With all three moving averages positioned above the current price, BTC faces substantial resistance during any recovery attempt.
Momentum indicators also show a lack of decisive buying pressure. The Relative Strength Index stands near 48, slightly below its neutral midpoint of 50.
Meanwhile, the Moving Average Convergence Divergence line remains marginally below zero and close to its signal line. The setup reflects weak and largely directionless momentum rather than a confirmed bullish reversal.
Bitcoin must reclaim the 50-day EMA at $64,625 to improve its short-term outlook. A sustained break above this level could allow buyers to target the 100-day EMA at $66,795.
Further gains would bring the 200-day EMA at $72,045 into focus, followed by the broader horizontal resistance at $75,719.
On the downside, Bitcoin’s immediate support is located at $62,345. Buyers may attempt to defend this level if geopolitical and macroeconomic pressures continue.
A decisive daily close below $62,345 would strengthen the bearish outlook and potentially trigger a deeper correction toward the yearly low of $57,800, established on July 1.
