By Nina Shah - Financials analyst
Bitcoin regained momentum in Asian trading on Tuesday, climbing above $70,000 as market risk appetite improved following remarks from U.S. President Donald Trump about the conflict involving Iran. The world’s largest cryptocurrency was last up 3.4% at $70,201.3 by 01:02 ET (05:02 GMT), having touched $70,558.4 earlier in the session.
That rebound came after Bitcoin briefly sank to roughly $65,000 within the prior 24 hours, a move driven by investors stepping away from riskier assets amid a surge in oil prices that amplified concerns about global inflation.
Trump comments and market reaction
Sentiment on Tuesday improved after President Trump said the conflict involving Iran could be resolved soon, language that helped soothe markets that had been rattled by the possibility of a prolonged regional confrontation. He added that while the situation might be resolved, it was unlikely to end this week. Mr. Trump also warned that the United States would respond "20 times harder" if Iran attempted to close the Strait of Hormuz, the strategically important shipping route for global oil supplies.
The comments coincided with a pullback in oil, which retreated to near $90 per barrel on Tuesday after approaching $120 per barrel on Monday. The decline in oil prices alleviated some immediate inflationary pressure that had been weighing on financial markets.
Equities and broader risk assets
Asian stock markets recovered part of the previous session's losses on Tuesday, following gains on Wall Street overnight. Cryptocurrency markets generally moved in step with the improved risk sentiment. However, traders remained cautious given that developments in the Middle East continued to influence commodity prices and overall market risk sentiment.
Market participants were also positioning ahead of key U.S. inflation releases later in the week. The U.S. January consumer price index is due on Wednesday, and the February personal consumption expenditures price index - the Federal Reserve's preferred inflation gauge - is scheduled for Thursday. These reports are likely to influence interest-rate expectations and risk asset valuations.
Altcoins and market breadth
Most alternative cryptocurrencies advanced on Tuesday, though many traded in relatively narrow ranges. Ethereum rose 1.8% to $2,046.92, while XRP advanced 2.3% to $1.38. Solana climbed 3%, Cardano gained 1.2%, and Polygon was largely flat. Among meme tokens, Dogecoin increased 0.6%.
Overall, the market's rebound reflected improved risk appetite after the de-escalatory tone from the U.S. president and the retreat in oil prices, but uncertainty tied to regional developments and upcoming inflation prints kept investors cautious.