Oil prices are steering bitcoin’s next move—and right now, it’s too close to call.

Bitcoin’s (BTC) next move is increasingly being dictated by oil, with macro forces overshadowing crypto-specific drivers.

The asset has rebounded to around $70,900 from lows near $67,000 earlier this week, following a risk-on shift sparked by the U.S.-Iran ceasefire that sent crude prices down roughly 15% to below $100 per barrel.

But the bounce lacks conviction. Bitcoin has repeatedly pushed above $70,000 in recent weeks, only to lose momentum—highlighting persistent uncertainty in the market.

According to Bitfinex analysts, the key lies in whether oil continues to weaken. A sustained 15%–16% drop in crude could accelerate expectations for rate cuts, creating a more supportive environment for bitcoin and other non-yielding assets.

Lower oil prices would also help ease inflation pressures, potentially giving the Federal Reserve room to pivot later this year.

Positioning adds another layer to the setup. A large concentration of leveraged short positions sits just above current levels, leaving the market vulnerable to a squeeze.

“About $6 billion in shorts are clustered between $72,200 and $73,500,” said Adam Saville Brown of Tesseract Group. “A breakout through that zone could trigger a wave of liquidations, pushing bitcoin toward $80,000.”

For now, though, rate-cut expectations remain muted. Elevated energy prices risk keeping inflation sticky, which could lock the Fed into a higher-for-longer stance with rates around 3.5%.

Meanwhile, geopolitical risks are re-emerging. The ceasefire that fueled the rally is already showing signs of strain, with renewed tensions and disruptions to shipping through the Strait of Hormuz.

That leaves oil vulnerable to another spike—an outcome that could quickly flip sentiment back to risk-off.

“If talks collapse and oil climbs back above $100, markets could revert just as quickly,” Brown said.

Bitfinex analysts added that crude could surge toward $120 if disruptions persist, further delaying any prospects of monetary easing.

With the ceasefire limited to a two-week window, markets are facing a binary outcome. The direction of oil—and its impact on inflation and rate expectations—will likely determine bitcoin’s next major move.