Middle East Tensions Weigh on Bitcoin Recovery
Bitcoin's price recovery has slowed down as investor caution grows amid escalating tensions in the Middle East. The cryptocurrency traded above $79,000 on Wednesday after falling more than 2.4% over the previous two days.
Institutional investors are becoming more cautious, with spot exchange-traded funds recording modest net outflows of $45.65 million on Tuesday, according to SoSoValue. This marks the end of a three-day streak of inflows that began last week.
The escalating tensions between the United States and Iran have broadened the confrontation and kept the geopolitical risk premium elevated. This has potentially weighed on investors' appetite for riskier assets and added pressure on Bitcoin.
Bitcoin derivatives activity remains subdued, with open interest in CME Bitcoin futures increasing slightly and the contango widening to 0.5%. Annualized futures premiums remain below 5%, pointing to cautious investor positioning.