Bitcoin Reclaims $80,000 as Oil Price Drops Sharply

Source Beincrypto

The Bitcoin price climbed back above $80,000 on Wednesday as US crude oil slid to a three-week low after Democrats won control of Congress.

Bitcoin (BTC) traded near $80,700, up about 4.4% in 24 hours as of this writing. West Texas Intermediate (WTI), the US oil benchmark, fell to about $93.54, roughly 12% below last Friday’s $106.2 peak, cutting fuel costs for US drivers and businesses.

Bitcoin and Oil Price Performances. Source: TradingView

Why Did Oil Fall So Fast After the Midterms?

Democrats held 54 Senate seats and 228 House seats on Wednesday morning, according to an Associated Press tally.

Investors hope a Democratic Congress means more US restraint in the eight-month war with Iran, Al-Monitor reported. That war has lifted gas prices and fed US inflation.

President Donald Trump also said on Tuesday that the US had no immediate plans to strike Iran. Meanwhile, Qatar has stepped up mediation.

What Could Reverse Oil’s Slide and Bitcoin’s Rebound?

A senior Iranian official told Reuters the two sides remain far from a deal, and US forces struck missile sites on Iran’s Qeshm Island this week.

“[T]he underlying supply disruption risks around the Strait of Hormuz have not disappeared.”

Priyanka Sachdeva, head of market insights at Phillip Nova, made the point to Reuters.

Market commentator JustDario suggests without evidence that the selloff may be a buffer ahead of new large-scale attacks on Iran.

“The only way I can explain this relentless crush on crude oil future prices against any basic logic, is to build the largest possible buffer in preparation for the second round of large scale attacks against Iran,” he said.

Bitcoin has not always tracked oil. When crude fell on Monday’s peace-talk reports, gold and silver surged while Bitcoin lagged.

On Wednesday, the pioneer crypto dropped to about $75,700 before traders placed $420 million in bullish bets, BeInCrypto reported, ahead of the push past $80,000.

Next come the 68 uncalled House seats and Qatar’s talks, two tests for both oil and the Bitcoin price outlook.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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