The resurgence of the Iran war premium has taken a toll on the cryptocurrency market. Over the past 24 hours, bitcoin has fallen 2.1% to $75,633, while ether has dropped 3.4% to $2,244. This decline comes as Brent crude oil has jumped 7.1% to $126.41 a barrel, its highest intraday level in four years, following reports that President Donald Trump is set to receive a briefing on new military options against Iran.
The potential deployment of hypersonic missiles to the Middle East has raised concerns about a conflict, leading to a war premium in oil prices. As a result, the global benchmark for oil has seen a nine-day winning streak, with prices increasing over 100% year-to-date. Other cryptocurrencies, such as XRP and Solana, have also experienced declines, while dogecoin has seen a 3.8% increase. The surge in oil prices and a hawkish Fed have led to a decline in risk assets, with the dollar gaining and bonds sliding.
Bitcoin's ability to withstand the early stages of the war is being tested, with the asset holding a tight band between $74,000 and $78,000. However, each escalation headline has produced a sharper drawdown, and the cumulative damage is starting to show. According to Fernando Lillo, director at exchange Zoomex, any break above $80,000 requires the war premium to unwind, which would necessitate a resolution to the Middle East conflict and a drop in Brent crude oil prices below $100 per barrel.