Bitcoin Weekly Price Forecast: Middle East tensions and increasing Oil prices weigh on BTC

After taking a slight hit last weekend following US and Israeli strikes on Iran, Bitcoin (BTC) showed strength in the first few days of the week, charging above $73,000, while US spot BTC exchange-traded funds (ETFs) attracted about $1.14 billion in net inflows across three days. However, that rise was short-lived as the top crypto has fallen back below $70,000 amid further escalation of Middle East tensions, posting outflows of $228 million on Thursday, per SoSoValue data.

On Friday, the US Bureau of Labour Statistics reported that the labour market lost 92K jobs, below expectations of a 59K gain, with unemployment coming in at 4.4%, above expectations of 4.3%. While a weakened labour market should put discussions of a rate cut back on the Federal Reserve's (Fed) table, the impact of the Middle East crisis on Oil prices is drawing more attention.

Brent Oil has surged by 6% toward $90 on Friday, extending its rise this week to about 18%. The push comes following President Donald Trump's statement that the US will not enter into any "deal with Iran except unconditional surrender."

A Fed study found that every $10 increase in Oil prices could raise the Consumer Price Index (CPI) by 20 basis points, according to The Kobeissi Letters. Such a move could push inflation further above the Fed's 2% target, potentially prompting an interest rate increase, which has historically held back Bitcoin's price.

Fed Governor Christopher Waller noted in a Bloomberg interview on Friday that the rising Oil price may not affect the Fed's view on the rate decision "if it unwinds in [...] a couple of weeks." However, it becomes a risk to the central bank's outlook if the effects "become more permanent."

Why traders fear a Bitcoin sell-off after an institution's BTC transfers

Last week, high-frequency trading firm Jane Street Group LLC was sued for alleged insider trading by the entity overseeing legal proceedings on Terraform Labs, the parent company of the failed UST/LUNA stablecoin. The latter fell like a house of cards, ushering in the deep crypto winter of 2022. 

The allegations have resurfaced as on-chain analysts spot wallets allegedly linked to Jane Street depositing $19 million in Bitcoin to institution-focused exchanges, according to data from Arkham Intelligence. Jane Street has allegedly been associated with an orchestrated drop in Bitcoin's price during US hours.

Bitcoin bears set to win, unless this level is breached

Bitcoin could continue its decline, testing the $68,000 support level. The next key support lies at $65,000. Unless Bitcoin sees a daily candlestick close above the $72,000 level, the correction is likely to continue. 

Sideways trading could see Bitcoin's price fluctuate between the upper boundary of $74,000 and the lower boundary of $65,000 all week. The $65,000 support is 5% below the current price level, and the $74,000 key resistance is 8% above. 

Two key momentum indicators, the Relative Strength Index (RSI) and Moving Average Convergence and Divergence (MACD), show mixed signals. It remains to be seen whether the price recovers; until then, traders should tread cautiously and brace for a week of sideways Bitcoin price action.

A test of the $74,000 resistance, and a clean break above could confirm a bullish move, potentially pushing Bitcoin higher in the weeks ahead.