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Bitcoin (BTC) Price Slips Under $70K Amid Iran Tensions and Upcoming CPI Report

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Brian Armstrong's Bold Prediction: AI Agents Will Soon Dominate Global Financial

TLDR

  • BTC declined 0.5% to approximately $69,583 during Wednesday’s Asian session
  • The cryptocurrency momentarily climbed past $70K on Tuesday following Trump’s Iran peace comments
  • Wednesday’s US CPI release could influence Federal Reserve policy outlook and digital asset markets
  • Spot Bitcoin ETFs recorded $251 million in net inflows on March 10
  • Market sentiment indicator Crypto Fear & Greed Index holds at 15, maintaining “extreme fear” status

Bitcoin retreated beneath the $70,000 threshold during Wednesday’s Asian session, declining 0.5% to reach $69,583.5 as of 01:55 ET. This pullback followed Tuesday’s temporary bounce above $70,000.

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Bitcoin (BTC) Price

Tuesday’s upward momentum received support from statements by US President Donald Trump, who indicated the Iranian conflict might be “pretty much” concluded. This commentary temporarily boosted market sentiment and lifted Bitcoin from the mid-$60,000 levels observed earlier in the week.

Subsequently, Trump issued a message on Truth Social warning that any Iranian interference with petroleum supplies would trigger heightened US military action. Meanwhile, military engagements involving US, Israeli, and Iranian forces in the Gulf region have persisted.

Crude oil valuations had surged near $120 per barrel following the practical closure of the Strait of Hormuz, disrupting critical maritime trade channels. While prices moderated following Trump’s preliminary statements, they continue trading at elevated levels.

Blockchain analytics provider Santiment documented a return to bullish sentiment on social platforms Tuesday. Favorable discussions increased across X, Reddit, and Telegram in response to Trump’s statements and the petroleum price decline.

Institutional Activity and Bitcoin ETF Momentum

US-listed Bitcoin spot exchange-traded funds registered combined net inflows totaling $251 million on March 10. Corporate Bitcoin accumulator Strategy acquired approximately 18,000 BTC last week and executed an additional purchase this week.

Merkle Tree Capital’s Chief Investment Officer Ryan McMillin observed that Bitcoin has maintained support above its February lows while demonstrating strength amid geopolitical turbulence. He suggested that bearish positions could experience pressure toward the $80,000 level.

Rachael Lucas, a cryptocurrency analyst with BTC Markets, indicated that recapturing the $70,000 level publicly triggers FOMO concerns, identifying it as a crucial resistance threshold.

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Market Sentiment Remains Deeply Pessimistic

Notwithstanding enhanced social media optimism, Wednesday’s Crypto Fear & Greed Index registered 15, remaining firmly in “extreme fear” territory. Google Trends data for “Bitcoin” searches measured approximately 71, retreating from the March 5 peak of 100.

The United States Consumer Price Index report arrives later Wednesday. These inflation metrics could reshape Federal Reserve monetary policy projections and impact risk sentiment across cryptocurrency markets.

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Market participants are also monitoring developments around the stalled CLARITY Act. Reports indicate US lawmakers are pursuing a compromise regarding stablecoin yield regulations, which represents a contentious issue between traditional banking institutions and cryptocurrency companies.

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Crypto World

Aave V3 Avoided Unrecovered Bad Debt From 2023 to 2025: Study

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Aave V3 Avoided Unrecovered Bad Debt From 2023 to 2025: Study

A Bank of Canada staff paper found that Aave V3 reported zero non-performing loans in 2024, with overcollateralization and automated liquidations helping prevent lender losses in its Ethereum lending market.

Using transaction-level data from Jan. 27, 2023, to May 6, 2025, the study found that positions were typically liquidated before collateral values fell below outstanding debt, helping contain lender losses across the sample.

But the model came with a tradeoff, the paper said. While it protected lenders from unrecovered losses, it also shifted risk onto borrowers and constrained capital efficiency compared with traditional lending systems.

According to the paper, Aave V3’s design relies on automated risk controls rather than traditional underwriting, requiring borrowers to post more collateral than they borrow and liquidating positions when they breach risk thresholds.

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Daily lending earnings, circulating supply, and borrowing volumes (USD) on Aave V3. Source: Bank of Canada

Recursive leverage fueled borrowing demand

According to the paper, Aave V3’s lending activity was not driven solely by users seeking liquidity. It found that recursive leverage accounted for over 20% of total borrowed volume and 8.2% of borrowing transactions during the sample period. 

Recursive leverage involves repeatedly borrowing against collateral, redeploying the borrowed assets as new collateral and borrowing again to amplify exposure.

Related: Aave V4 goes live on Ethereum after governance vote clears rollout

The study said the dynamic made borrowers more exposed when markets turned. According to the paper, liquidations on Aave V3 tended to occur in concentrated waves, with four assets accounting for 90% of total liquidated value. 

This includes Wrapped Ether (WETH), Wrapped Staked Ether (wstETH), Wrapped Bitcoin (WBTC) and Wrapped eETH (weETH).

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The paper estimated that borrower losses during major liquidation events could be significant. It said liquidation fees typically ranged from 5% to 10% of liquidated value, while missed gains from subsequent price recoveries pushed combined losses to about 10% to 30% in some cases. 

The staff paper suggested that while the design for Aave V3 helped prevent unrecovered bad debt in the sample, it did so by exposing borrowers to abrupt losses when collateral prices fell sharply. 

Cointelegraph reached out to Aave for comment but did not receive a response before publication.

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