New York: Bitcoin prices declined as rising crude oil prices, renewed US-Iran tensions and uncertainty around cryptocurrency regulations pushed investors towards safer assets. The world’s largest cryptocurrency fell 1.4% from an intraday high of $66,300 to $65,368, bringing the crucial $65,000 support level back into focus.
The latest decline comes after Bitcoin failed to sustain momentum above the $66,000 mark. While institutional demand through spot Bitcoin exchange-traded funds (ETFs) continues to provide some support, traders are becoming cautious due to growing geopolitical risks and concerns over inflation.
Bitcoin’s recent recovery from lower levels has slowed as global markets react to developments in the Middle East, rising energy prices and uncertainty around the future direction of interest rates.
Geopolitical tensions and oil surge pressure Bitcoin
The biggest immediate challenge for Bitcoin has been the sharp rise in crude oil prices. West Texas Intermediate (WTI) crude increased nearly 4% to around $90 per barrel on July 23, extending its gains for the fifth consecutive session. Brent crude also moved closer to $99 per barrel amid concerns over possible disruptions to global energy supplies.
The rise in oil prices followed reports of attacks on Saudi oil tankers and growing tensions involving Yemen’s Houthi rebels and regional shipping routes. The UK Maritime Trade Operations agency reported that a tanker caught fire after an incident near Al Shuqaiq, while the Houthis claimed responsibility for attacks on two Saudi vessels.
The situation escalated further after US President Donald Trump warned that Washington would target Iranian infrastructure if Tehran attacked ships in the Strait of Hormuz. Iranian authorities responded with warnings of retaliation against US-linked energy and infrastructure assets.
Market participants fear that a prolonged rise in energy prices could push inflation higher in the United States. Higher inflation may reduce the possibility of aggressive interest rate cuts by the US Federal Reserve, which could negatively impact risk assets such as Bitcoin.
Regulatory uncertainty weighs on crypto sentiment
Apart from macroeconomic concerns, uncertainty surrounding cryptocurrency regulations has also affected market sentiment.
Political challenges emerged after Senate Democrats opposed parts of the proposed Digital Asset Market Clarity Act. The legislation aims to establish clearer rules for digital assets, but disagreements over investor protection and ethics standards have created uncertainty.
Prediction markets have reduced the probability of the bill becoming law in 2026, reflecting concerns among investors about delays in establishing a clear regulatory framework for the cryptocurrency industry.
Adding to the pressure, cryptocurrency derivatives exchange BitMEX announced plans to shut down operations on September 23 following a strategic review by its parent company HDR Global Trading. The exchange has stopped accepting new registrations and instructed users to close positions and withdraw funds before operations end.
Institutional investors continue supporting Bitcoin
Despite short-term selling pressure, institutional demand remains a positive factor for Bitcoin.
US spot Bitcoin ETFs recorded net inflows of $69 million on July 22, marking the seventh consecutive session of positive inflows, according to SoSoValue data. The seven-day streak resulted in approximately $1 billion entering Bitcoin ETFs.
However, the inflows remain lower compared with the $6.9 billion withdrawn during May and June. Analysts believe institutional interest is helping Bitcoin maintain support levels, but broader economic conditions will play a major role in determining the next move.
Technology stocks have also emerged as a factor affecting Bitcoin sentiment. Investors are closely watching increased artificial intelligence-related spending by major technology companies, including Alphabet. Weakness in high-growth stocks often impacts Bitcoin because both markets attract investors looking for higher returns and are sensitive to interest rate changes.
Bitcoin technical outlook remains cautious
From a technical perspective, Bitcoin continues to trade inside an ascending channel that began near $57,800 in early July. The lower boundary of this channel currently lies around the $65,000-$65,400 range, making the ongoing test of this zone important.
If Bitcoin successfully holds above $65,000, analysts expect the cryptocurrency could attempt a recovery towards $66,800. A move above that level may open the possibility of reaching the $67,500-$68,000 range.
Crypto trader Ted Pillows suggested that Bitcoin could move towards the $67,500-$68,000 zone if the $65,000 support remains intact.
However, some analysts remain cautious. Analyst Lennaert Snyder believes Bitcoin may need to test lower levels before a stronger recovery begins. He identified a possible buying opportunity after a move below $65,000, while highlighting $68,100 as an important resistance level.
Technical indicators also suggest weakening momentum. The MACD indicator has turned weaker, while the Relative Strength Index (RSI) has fallen to 53.52 from above 60, showing that buying strength has reduced.
On the daily chart, Bitcoin remains above its 20-day moving average of $64,232 and the 50-day moving average of $63,171, keeping the broader recovery structure intact. However, it remains below the 100-day and 200-day moving averages at $70,044 and $72,602 respectively.
Bitcoin’s next move depends on global risks
Bitcoin’s short-term direction will likely depend on whether it can defend the $65,000 support level. A successful defence could encourage buyers and push prices towards $68,000. However, further increases in oil prices, rising bond yields or worsening geopolitical tensions could trigger additional selling.
If Bitcoin falls below $63,170, analysts believe the recovery trend could weaken significantly, with possible downside targets near $61,500 and the late-June support zone around $59,000.
For now, Bitcoin remains caught between strong institutional support and growing macroeconomic risks. Investors will closely monitor oil prices, US inflation expectations and regulatory developments before deciding the next major move.