Bitcoin steady above $70,000 as IEA proposes largest-ever oil reserve release

• Bitcoin briefly climbed to about $71,600 before easing back near $70,000, as a sharp drop in oil prices revived risk appetite across global markets.
• The International Energy Agency has proposed its largest-ever release of crude reserves to counter Persian Gulf production cuts, easing fears of persistent inflation and slightly strengthening the case for Federal Reserve rate cuts later this year.
• Analysts say bitcoin is trying to break out of its recent trading range, with $70,000 as a key support and $73,000 as a crucial resistance level, while major altcoins trade mostly steady ahead of the Fed's March 17-18 meeting.

Bitcoin BTC$69,951.35 touched $71,612 on Tuesday evening before settling back to $70,036 by Wednesday's Asian session, as oil price slide revved up risk sentiment.

A key catalyst was a Wall Street Journal report that the International Energy Agency had proposed the largest crude reserve release in its history, exceeding the 182 million barrels released in 2022 after Russia's invasion of Ukraine.

The proposal responds to Persian Gulf production cuts that have removed roughly 6% of global oil output since the Iran war began, sending jet fuel and cooking gas prices soaring worldwide.

Brent crude dropped below $90 per barrel on Wednesday after plunging 11% in the prior session. That matters for crypto because oil has been the transmission mechanism connecting the Middle East conflict to every risk asset on the planet. Higher oil means stickier inflation, which means no rate cuts, which means tighter liquidity and further pressure for risk assets.

Bitcoin was trading at $70,036 on Wednesday morning after reaching as high as $71,612 on Tuesday evening, up 2.5% on the week. The move from Monday's low near $66,000 to Tuesday's high amounts to roughly 8.5% in two days, though the overnight pullback gave back some of those gains.

"Bitcoin trading above $70,000 tells you buyers are trying to push this market out of consolidation, but it still has to prove it can hold," said Daniel Reis-Faria, CEO of ZeroStack, said in a mail. "The difference this time is that leverage had cooled off a bit before the move higher, which gives it a more stable setup."

"Now it comes down to whether Bitcoin can stay above $70,000 and build from there, or whether it slips back into the same pattern we've been in for weeks," he added.

Elsewhere, FxPro analysts noted that bitcoin is forming a series of higher local lows since the end of February, the first structural sign of buyers gaining confidence within the range.

But they flagged $73,000 as the level that matters, where last week's peak and the 50-day moving average sit together.

The broader market was calm. Ether held at $2,034, down 0.3% on the day but up 2.8% on the week. BNB was flat at $643. XRP edged up 0.3% to $1.38 with a 1.7% weekly gain. Solana added 0.2% to $86.42 but remains down 0.8% over seven days, still the weakest major on a weekly basis.

Dogecoin was up 1% to $0.093, holding onto some of Tuesday's Musk-driven gains.

The Fed meeting on March 17-18 remains the next major event. With oil potentially easing on the IEA reserve release, the stagflation scenario that had been pricing into markets last week looks slightly less severe.

If crude stays below $90, the argument for rate cuts later this year gets marginally stronger. Bitcoin's 90-day correlation with the S&P 500 is still at 0.78. Whatever the Fed signals, crypto will trade it.

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