The key question is: what happens when renewable energy is acknowledged as the superior technology for generating electricity? Essentially, we are witnessing a process of substitution — one commodity producer replacing another, with renewables displacing fossil fuels — which brings us to the issue of the “minimum viable scale” within this assumed energy transition.

“Minimum viable scale” refers to the minimum level of operation or throughput needed to keep a system functioning and economically viable. Imagine a toll road that charges all vehicles to fund maintenance and operations. If traffic falls sharply, revenues decline, maintenance budgets shrink, breakdowns begin, and eventual collapse or abandonment becomes likely. This closely resembles the older concept known as the “death spiral,” where a shrinking number of utility customers bears steadily rising costs. As low-cost renewables continue to displace fossil fuels from electricity generation, a similar dynamic could affect the structure of the fossil fuel industry. In the United States, there are two separate fossil fuel infrastructures: railcars and mines for coal, and drilling rigs and pipelines for natural gas. The concern around minimum viable scale is that if fossil fuel production falls low enough — as renewable penetration rises and coal and gas generators operate fewer hours — the industry may no longer generate sufficient revenue to sustain two competing infrastructures in a permanently shrinking market.

Coal plant operators in China are already adapting to the “new reality” of low-cost renewables. They are retrofitting their fleets so that plants originally built for baseload operation can run in more flexible cycles — operating intermittently with greater efficiency — because their output is increasingly displaced by cheaper renewables. These fossil fuel plants, once designed for baseload generation, must now operate more intermittently to remain economically viable. This may soon become the challenge elsewhere, but with an interesting twist. China has far smaller domestic gas reserves than the United States, so aligning coal generation with renewables makes sense. The United States, however, has two fossil fuels competing for power generation. As one movie shogun famously said: “Let them fight.”

At this point, the minimum viable scale issue becomes a problem for domestic energy producers. Renewables are “eating away” at conventional power output, and as in the toll road analogy, revenue may no longer be sufficient to support two parallel fossil fuel infrastructures for electricity generation. Coal power requires extensive mining operations and rail links, while gas plants rely on drilling, processing, and pipeline networks. In a weak pricing environment and a shrinking demand base, both may no longer be needed — at least not for electricity generation.

Our conclusion, which frankly surprised us, is that coal-fired electricity could experience a modest revival. A coal plant located “at the mine mouth” — where the plant sits literally beside an active mine — requires far less fuel infrastructure than a comparable gas-fired plant. It is also worth observing what is happening in electricity markets themselves. Renewables, in places such as Australia, are fully displacing fossil fuel electricity for increasingly long periods, with significant reductions in consumer prices. This reduces revenues for fossil fuel generation and associated infrastructure, as assets sit idle for longer and longer intervals. Fossil fuel generation will still be needed, especially in winter when days are shorter and wind output is often weak, but far fewer facilities will be required. We expect intense competition for shares of a rapidly shrinking market.

There are also two additional factors that could strengthen coal’s position as a boiler fuel even as the technology enters its later years. The first is storage: coal stockpiles sufficient for several months can be maintained next to power plants without concerns over delivery reliability or price volatility. The second is that gas well freeze-offs during winter represent a major reliability issue, repeatedly exposing serious system weaknesses. Every recent severe cold spell has highlighted these vulnerabilities. As dependence on fossil fuels for winter electricity generation increases, the relatively weaker performance of gas delivery systems may become more problematic. Gas has long been favored as a boiler fuel in new plants because it is cleaner and cheaper. However, the United States is now moving away from clean-air emissions standards for power plants. It would not be surprising if the current administration reclassified pollutants such as sulfur dioxide and nitrogen oxides — key emissions from coal combustion — as “freedom particles.” From a competitive standpoint, this would remove one of gas’s strongest advantages, effectively making coal “clean” as well. At that point, the gas industry’s primary argument is that it remains cheaper than coal. Yet with rising and more volatile gas prices driven by expanding US liquefied natural gas exports, even this claim is becoming vulnerable.

We previously wrote about the technological transition from the telegraph to the telephone (“What the fall of the telegraph says about fossil fuels,” February 11, 2026). Natural gas, at least in the electricity sector, has long been considered coal’s successor — the so-called “bridge fuel.” If renewables become dominant — as we believe they will — there will likely be neither the need nor the willingness to continue paying for the massive infrastructures required to support both gas and coal in electricity generation. This is where the minimum viable scale problem emerges. Coal plants tend to perform better than gas during winter conditions, and their fuel prices are less volatile. As coal and gas compete for a shrinking share of electricity generation, coal should not yet be ruled out.

The main conclusion is that fossil fuels, over the longer term, will not be widely needed for baseload electricity generation (as seen in China), and the large infrastructures tied to them may become economically unviable, even if they remain necessary to complement renewables. In other words, due to inconsistent energy policies, we may face the risk of a disorderly collapse in energy infrastructure caused by insufficient revenue.

Bitcoin rose again above the $68,000 level, posting gains of 1.8% today. On the surface, this appears to be another gradual move within a broader consolidation range. However, beneath the price action, the structural landscape is quietly changing. After months of measured distribution near previous highs, large holders are rebuilding their positions. On-chain balance data shows that the entire decline in whale reserves following the October peak has now been fully reversed. This is not random accumulation, but coordinated absorption during corrective weakness.

The key question is no longer whether Bitcoin can hold above $68,000, but whether this phase of reaccumulation represents the early foundation for a broader structural breakout.

Whale accumulation returns — strategically

Wallets holding between 1,000 and 10,000 Bitcoin — typically classified as institutional-level participants or entities with deep liquidity — added around 200,000 Bitcoin during the past month alone. On-chain data shows a sharp V-shaped recovery in reserves. The previous decline in large-holder balances began shortly after the local peak in October, coinciding with a period of market exhaustion. That distribution phase now appears to have been fully reversed.

This shift is important for two main reasons.

First, historical patterns show that whale distribution often aligns closely with local market tops. Their current behavior — accumulating during consolidation phases — suggests a move from defensive positioning toward strategic rebuilding of exposure.

Second, the flow appears to be driven by spot buying rather than leverage. Large transaction volumes dominate recent order flow data, while retail participation remains relatively limited. Markets driven by spot absorption tend to stabilize before expanding; they build price bases before making headlines. In practical terms, liquid supply is being quietly reduced. When 200,000 Bitcoin moves into strong hands within a 30-day window, market sensitivity to additional demand increases significantly.

Price channel breakout signals a momentum shift

On the hourly chart, BTCUSD recently broke above a clearly defined descending channel that had capped price action after rejection near the $69,800 level. That channel produced a sequence of lower highs, pushing price toward the support zone between $66,800 and $67,000. The breakout above the upper boundary suggests that short-term bearish momentum has been neutralized.

Technically, this carries importance because descending channels often represent corrective phases within broader uptrends. Breaking out of such patterns typically signals the start of a new impulse wave, provided higher-timeframe resistance levels are cleared.

The $69,500–70,000 zone remains the first major supply area following the recent rejection, while $71,200 represents the key structural and psychological resistance level on both the hourly and daily charts. The $67,000 level now acts as short-term support, aligning with the previous channel base, while the broader weekly higher-low zone remains between $65,000 and $66,000. Holding above $67,000 keeps the short-term bullish structure intact.

A confirmed weekly close above $70,000 would open the path toward the next major supply pocket between $74,000 and $76,000, where historical trading activity suggests concentrated liquidity. Failure to reclaim $70,000 would likely extend the consolidation phase, though with an increasingly stronger structural base forming underneath price.

Bitcoin’s Sharpe ratio improves as whale accumulation continues

Bitcoin’s Sharpe ratio has recovered from recent lows, suggesting that the latest correction was a volatility reset rather than a structural breakdown.

Similar bottoms in the past have tended to coincide with accumulation phases rather than cyclical tops. The current improvement in risk-adjusted returns comes alongside disciplined funding rates and continued whale accumulation, reflecting normalization rather than speculative excess. In other words, the market appears to be rebuilding risk balance beneath resistance zones — a healthier context compared with previous impulsive rallies.

Bitcoin’s next move depends on this level

Bitcoin trading above $68,000 is not merely a technical event. It coincides with the addition of roughly 200,000 Bitcoin to whale wallets over the past month, fully reversing the post-October distribution phase.

As long as price remains supported above the $66,000–67,000 region, this accumulation continues to underpin the structural outlook. The critical pivot remains $70,000. A confirmed weekly reclaim of that level would align tightening supply conditions with technical breakout criteria, potentially opening the path toward $74,000–76,000. If resistance holds, consolidation may continue, but with major holders returning, downside pressure appears increasingly absorbed rather than accelerating.

Oil prices traded near six-month highs on Friday, heading for their first weekly gain in three weeks, amid growing concerns over the potential for conflict after Washington said Tehran would face consequences if it failed to agree to a nuclear deal within days.

Brent crude futures fell by 25 cents, or 0.35%, to $71.41 per barrel by 11:30 GMT, while US West Texas Intermediate crude declined by 30 cents, or 0.45%, to $66.13 per barrel.

For the week, Brent was up 5.3%, while West Texas Intermediate gained 5.2%.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, said: “We are waiting for a potentially decisive outcome, if we take Trump’s statements seriously.” He added: “The market is nervous, and today will be a day of waiting and watching.”

US President Donald Trump said on Thursday that “very bad things” would happen if Iran did not agree to scale back its nuclear program, setting a deadline of between 10 and 15 days.

In response, Iran plans to conduct joint naval exercises with Russia, according to local media, just days after temporarily closing the Strait of Hormuz as part of military drills.

Iran, one of the world’s major oil producers, sits across the oil-rich Arabian Peninsula along the Strait of Hormuz, through which about 20% of global oil supply passes. Any conflict in the region could restrict oil flows to global markets and push prices higher.

Priyanka Sachdeva, Senior Market Analyst at Phillip Nova, said: “Market focus has clearly shifted toward escalating tensions in the Middle East after several rounds of US-Iran nuclear talks failed, even as investors continue debating whether any actual disruption will occur.”

Analysis from Saxo Bank showed that traders and investors increased purchases of Brent call options in recent days, betting on higher prices.

Oil prices also found support from reports of falling crude inventories and export constraints among major oil-producing and exporting countries.

A report from the US Energy Information Administration on Thursday showed that US crude inventories fell by 9 million barrels, alongside higher refinery utilization rates and increased exports.

However, concerns about the outlook for US interest rates — in the world’s largest oil-consuming country — limited further price gains.

Sachdeva said: “Recent Federal Reserve minutes suggesting rates could stay unchanged or even rise further if inflation remains elevated could weigh on demand.”

Lower interest rates typically support crude prices.

Markets were also assessing the impact of abundant supply, amid discussion that the OPEC+ alliance may resume oil production increases starting in April.

JPMorgan analysts Natasha Kaneva and Lyuba Savinova said in a note that the oil surplus evident in the second half of 2025 persisted into January and is likely to continue.

They added: “Our balance forecasts still point to large surpluses later this year,” noting that production cuts of around 2 million barrels per day would be required to prevent excessive inventory buildup in 2027.

The dollar was on track on Friday to post its biggest weekly gain since October, supported by a series of better-than-expected economic data and a more hawkish tone from the Federal Reserve, as tensions between the United States and Iran continued to rise.

The dollar index, which measures the US currency against a basket of major currencies, edged higher on Friday and was heading for a weekly gain of around 1.1%.

Labor market data supported the dollar in the previous session, as the number of Americans filing new claims for unemployment benefits fell by more than expected last week, confirming continued stability in the labor market.

Earlier in the week, minutes from the Federal Reserve’s latest meeting showed that policymakers remain divided on the path of interest rates amid persistent inflationary pressures.

Dominic Bunning, Head of G10 FX Strategy at Nomura, said: “Between relatively strong data and a less dovish tone from the Fed in the minutes, along with some tensions in the Middle East and a degree of investor repositioning, it is understandable why the dollar has managed to rebound.”

Investors often turn to the dollar during periods of escalating geopolitical tension.

Markets positioning for risk

US President Donald Trump warned Iran on Thursday that it must reach an agreement on its nuclear program or face “very bad things,” giving Tehran a deadline of 10 to 15 days to cooperate. Iran said it would respond against US bases in the region if attacked.

Derek Halpenny, Head of Research for Global Markets EMEA at MUFG, said: “With the military buildup in the Middle East and Trump’s comments, I think markets will definitely position for the possibility that something could happen over the weekend.”

He added that any jump in crude oil prices could leave several currencies exposed to pressure, including the euro, Japanese yen, and British pound.

“These are the currencies that could see larger moves,” he said.

Sterling stabilized near a one-month low at $1.3455 and was on track for a weekly loss of 1.4%, its largest since January 2025.

The euro fell by 0.1% to $1.1760 and was heading for a weekly decline of nearly 0.9%, also weighed by uncertainty surrounding European Central Bank President Christine Lagarde’s term.

Interest rates

Markets are awaiting the release later on Friday of the US core personal consumption expenditures price index and preliminary fourth-quarter gross domestic product data, which could determine the next direction for currencies.

Investors are still pricing in about two rate cuts by the Federal Reserve this year, although the probability of a June cut has slipped to around 58% from 62% a week earlier, according to the CME Group FedWatch tool.

Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management, said: “The main debate within the Fed is whether rates should be cut preemptively to support the labor market, or kept higher for longer to fight inflation.”

He added that Friday’s personal consumption expenditures report “will add to that debate.”

In Japan, data released on Friday showed that annual core consumer inflation slowed to 2.0% in January, the weakest pace in two years.

Abhijit Surya, Chief Economist for Asia-Pacific at Capital Economics, said: “Today’s data will not create a sense of urgency for the Bank of Japan to resume tightening, especially given the weak recovery in activity during the past quarter.”

The Japanese yen fell more than 0.4% to 155.53 against the dollar.

The currency showed little reaction to a speech by Japanese Prime Minister Sanae Takaichi on Friday, in which she stressed her government’s commitment to reviving the economy.

Elsewhere, the New Zealand dollar was on track for a weekly loss of 1.3%, pressured by a more dovish interest rate outlook from the Reserve Bank of New Zealand.