Bitcoin rose on Friday, continuing to show strong relative price movement after months of lagging assets like stocks and precious metals.
Trading at $73,800, bitcoin is up nearly 5% in the past 24 hours, with most of those gains coming after US Treasury Secretary Scott Bessent said on Thursday night that the Donald Trump administration was taking concrete steps to try to limit the surge in oil prices.
Bitcoin is now up about 11% since the outbreak of war with Iran, outperforming broad U.S. stock indexes and gold, which have lost value since the bombs began falling about two weeks ago.
WTI crude oil traded at $94.50 a barrel on Friday, down from a high of nearly $98 on Thursday. American shares recorded a growth of about 0.5%.
Oil increases the risk of stagflation
The recent spike in oil prices is putting direct pressure on household budgets and, if sustained, could weaken consumption and slow economic growth, according to Fitch Ratings. This is stated by Olu Sonola, head of the department for the American economy in that agency.
“Yes, the broader economy is expected to continue to grow on trend, but that forecast looks increasingly fragile as downside risks pile up. … The Federal Reserve can ignore pockets of weaker growth, but re-inflation severely limits its room for maneuver, leaving policy potentially stuck for months,” he wrote in a note, according to SEEbiz.
Recovery after relief
After a period of one of the worst sentiment in bitcoin history, it’s perhaps no surprise that there have been some modest gains of late.
Funding positioning of perpetual futures traders was negative for the longest period since the end of 2022, noted K33 Research analyst Vetle Lunde. This means that traders who sell bitcoin short pay long positions to keep their trades open, resulting in a negative funding rate.
The end of 2022, of course, coincided with the aftermath of the FTX collapse, when BTC was trading around $16,000, down from $69,000 a year earlier.
The average 30-day funding rate has now been negative for 14 days in a row, the longest since December 2022, Lunde noted. These negative streaks coincided with local price bottoms over the past seven years, he added.
Meanwhile, bitcoin open interest in both perpetual and dated futures contracts rose 9% in the past 24 hours to around 700,000 BTC, the highest level since February 6. When all that is added up, an environment is created for the so-called short squeeze.
