Middle East Tensions Weigh on Bitcoin as Institutional Demand Remains Strong

Bitcoin (BTC) is trading near $78,000 on Monday after its recent rally, but strong institutional demand may be capped by escalating Middle East tensions, rising oil prices, and growing inflation concerns.

Institutional demand for Bitcoin remains robust, with spot ETFs recording a net weekly inflow of $924.48 million last week, marking the second week of heavy inflows. If this trend continues, it could support gains ahead.

However, geopolitical tensions in the Middle East have dampened risk appetite, keeping the war-risk premium elevated and supporting the US Dollar (USD). The rise in oil prices has also fueled expectations that the Federal Reserve could maintain a tighter monetary policy stance, limiting upside in risk assets like BTC.

The Crypto King faces rejection from its 50-week Simple Moving Average (SMA) at $80,334, but momentum remains strong. A bullish crossover on the weekly chart's Moving Average Convergence Divergence (MACD) and a reading above the neutral level of 50 on the Relative Strength Index (RSI) indicate improving momentum.