After a brief recovery rally over the weekend, Bitcoin price largely traded sideways throughout the day, as the broader market took a risk-off stance as tensions escalated between the US and Iran.

Following reports of military strikes over the weekend, Bitcoin briefly dipped toward the $63,000 level before recovering back above $65,000 by Asian hours on Monday. 

While the primary sell-off was absorbed during thin weekend liquidity, the lack of a decisive bounce-back left investors cautious as traditional markets prepared to react to rising oil prices and a strengthening US Dollar.

At the time of writing, the total crypto market cap had fallen nearly 2% to $2.35 trillion, while the crypto fear and greed index fell 4 points to 10, once again languishing in "Extreme Fear" territory.

Altcoin traders remained on the sidelines, waiting for a clearer directional cue from the S&P 500 and Bitcoin ETF flows, and as a result, almost all of the high-caps were trading in the red.

Bitcoin price traded sideways between $65,149.05 and $67,191 as traders digested a wave of geopolitical shock and technical aftershocks from the weekend sell-off.

Volatility over the past 24 hours was closely tied to the confirmed escalation in the Middle East. 

Reports of coordinated US and Israeli strikes and the subsequent death of Iran’s Supreme Leader triggered a broad risk-off reaction across global markets. 

Gold surged toward $5,300, the US Dollar Index strengthened, and crude oil pushed closer to $80 per barrel as investors rotated into traditional safe havens.

Bitcoin, often described as digital gold, did not behave like one in the immediate aftermath. Instead, it acted as a liquidity outlet. 

During periods of sudden macro stress, traders tend to reduce exposure to volatile assets first, and crypto remains one of the fastest ways to raise cash. 

That dynamic sent BTC briefly down to the $63,000 region, wiping out nearly $300 million in long positions within 24 hours as leveraged traders were forced out of their bets.

Anxiety specific to the crypto ecosystem added another layer of pressure.

Iran remains one of the lowest-cost Bitcoin mining hubs globally due to subsidised energy, with estimates placing production costs near $1,320 per BTC. 

With the region now facing a succession crisis and potential infrastructure disruption, market participants began pricing in the risk of a hash rate shock. 

There were also concerns that state-linked entities could liquidate Bitcoin holdings to stabilise domestic finances or fund retaliation efforts.

Even the possibility of forced selling was enough for some traders to front-run the move.

Meanwhile, under new Federal Reserve leadership, Kevin Warsh has signalled a more hawkish stance on inflation and a preference for a smaller balance sheet.

Rising oil prices linked to the conflict raise the prospect of renewed inflationary pressure, particularly if shipping lanes such as the Strait of Hormuz face disruption. 

Higher energy costs feed into broader price levels, and that reinforces expectations that interest rates may stay elevated for longer.

In such an environment, non-yielding assets like Bitcoin face a higher opportunity cost, especially when the dollar is strong.

Structurally, Bitcoin is still dealing with the aftermath of a technical breakdown.

The drop below $65,000 and $64,000 violated key psychological and chart support levels, even though the price has since hovered near them. 

The recent move also filled a prominent CME futures gap in the $65,000 to $64,800 zone, a level many algorithmic traders had been targeting. 

With that gap now technically closed, the market is searching for a new equilibrium.

By late Asian trading hours, Bitcoin price had recovered back above $68,000, which also puts the flagship token back above its 200-day Moving Average.

By holding above $65,000, Bitcoin is effectively flipping the old resistance into new support.

This suggests that the market has already priced in the immediate shock of the Iranian succession crisis and the initial hawkishness of the Warsh-led Fed.

The next major hurdle for the bulls is the $68,100 to $70,000 resistance zone.

At the time of publication, bulls were already attempting to break through this region, with price action gaining momentum as a wave of short liquidations accelerated the move higher, spurred by a sudden influx of liquidity at the US market open.

More than $91 million in short positions were liquidated in the past hour, with over $101 million wiped out across the past four hours. 

Bitcoin-linked shorts postions accounted for over $44 million of the figure.

That wave of forced buybacks triggered a classic god candle on the hourly chart, as cascading liquidations pushed price sharply higher within a short span.

BTC/USD 1-hour price chart. Source. CoinMarketCap.

A successful reclaim of the $70,000 support would signal that the weekend's geopolitical shock was temporary and further reinforce Bitcoin’s status as a safe-haven asset. 

Reclaiming this psychological resistance effectively flips a major resistance level back into a foundation, which could help ignite a fresh leg toward the $75,000–$80,000 range in the coming trading sessions.

However, in the event the latest bounce turns out to be a fake out, it may act as a bull trap designed to draw in late-stage buyers before a secondary flush. 

This is especially true if the $65,000 support level breaks, as the current macro environment remains heavily influenced by the hawkish stance of the Federal Reserve and the potential for further energy price spikes.

Meanwhile on X, crypto analysts noted that the Bitcoin price was testing the upper boundary of a symmetrical triangle pattern.

Historically, breaking above such a pattern leads to a period of high-velocity price discovery as the market resolves its state of indecision.

The post Bitcoin tests $70K resistance after liquidation-driven rebound appeared first on Invezz

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