The resurgence of the Iran war premium is having a significant impact on the cryptocurrency market. Over the past 24 hours, bitcoin has fallen by 2.1% to $75,633, while ether has declined by 3.4% to $2,244. This downturn is attributed to the surge in Brent crude prices, which have reached a four-year high of $126.41 a barrel.
The escalation of tensions in the Middle East, particularly the potential deployment of hypersonic missiles, has led to a war premium being factored into oil prices. As a result, the global benchmark for oil has been on a nine-day winning streak, with prices increasing by over 100% year-to-date. The cryptocurrency market is not alone in its decline, as risk assets across the board are experiencing losses. The Nasdaq 100 futures have erased earlier gains, while the MSCI's Asia Pacific share index has fallen by 1.4%.
The dollar has gained, and bonds have slid, as the surge in oil prices and a hawkish Fed have reduced demand for fixed income. Bitcoin's ability to withstand the early stages of the war is being tested, with the asset struggling to break above the $80,000 level. According to Fernando Lillo, director at exchange Zoomex, a break above $80,000 would require the war premium to unwind and a resolution to the Middle East conflict.
Lillo suggests that a possible scenario where the Trump administration lifts the blockade in the coming days could trigger a relief rally and pave the way for Bitcoin to consolidate above $80,000.