Hormuz Nerves Cost Bitcoin $65,000 Mark Despite Solid Institutional Flows

Bitcoin (BTC) slipped below $64,500 after Monday’s Wall Street open as markets digested more US-Iran uncertainty.

Key points:

• Bitcoin joins US stocks in selling off amid uncertainty over whether the Strait of Hormuz will reopen.
• The Japanese yen commands attention as it slides back toward historic lows against the dollar.
• Bitcoin analysis doubts market strength despite “exceptionally strong” institutional inflows.

Iran warns “no military solution” to Hormuz closure

Data from TradingView showed BTC/USD hitting $64,447 on Bitstamp, its lowest since Friday, before a modest rebound. 

BTC/USD one-hour chart. Source: Cointelegraph/TradingView

This mirrored US stocks, which initially fell as the odds of the Strait of Hormuz oil route reopening appeared to fade. 

Addressing Iran’s Islamic Consultative Assembly, deputy speaker Ali Nikzad said that the “opening of the Strait of Hormuz has no military solution,” as quoted by Al Jazeera and others.

US WTI crude oil was up by almost 5% on the day at $80.90 per barrel at the time of writing, while the S&P 500 index nonetheless reversed to turn green, still below Friday’s all-time highs.

CFDs on US WTI crude oil one-hour chart. Source: Cointelegraph/TradingView

Attention also remained focused on the Japanese yen, which continued to weaken against the US dollar despite an earlier rare joint intervention by Japan and the US. USD/JPY hit 159 on Monday, nearing the psychological boundary of 160 before the end of the week’s first Asia session.

Economist Mohamed El-Erian warned that more decisive government policy action from the Japanese side would be required.

“The yen has been weakening gradually since the large joint Japan-US FX intervention, a sharp reminder that the key to fixing a currency ‘mispricing’ is getting the policy mix right. The longer Japan delays in doing so, the more elusive the goal of this historic intervention becomes,” he wrote in a post on X.

USD/JPY four-hour chart. Source: Cointelegraph/TradingView

Bitcoin comeback “tentative” despite $865 million ETF inflows

Bitcoin analysts warned that the attempted BTC price rebound “remains tentative” despite some promising signals.

Related: Markets flip for Fed rate-hike pause into CPI: Five things to know in Bitcoin this week

Glassnode’s latest Market Pulse update highlighted weak spot-market momentum as one key missing component of a sustainable recovery.

“Momentum has returned toward neutral and spot taker buying has accelerated sharply, but overall centralized exchange turnover remains subdued,” the onchain analytics platform said. It added:

“This divergence points to improving demand within a broader consolidation regime rather than a broad-based expansion in speculative activity.”

Among the positive catalysts were institutional inflows, which Glassnode noted were “exceptionally strong.” Last week, the US spot Bitcoin exchange-traded funds (ETFs) recorded net inflows of $865.3 million, per data from UK-based investment company, Farside Investors.

US spot Bitcoin ETF netflows (screenshot). Source: Farside Investors

Data from onchain analytics platform CryptoQuant, meanwhile, showed that hedge funds had flipped net long CME BTC futures — an event that CEO Ki Young Ju described as “rare.”

“The basis trade keeps them structurally short. That’s why this chart’s been red for years. You can’t carry trade into a net long. The suits are betting on upside,” he told X followers.

CME Bitcoin futures positioning data. Source: Ki Young Ju on X.com