The resurgence of the Iran war premium has had a profound impact on the cryptocurrency market. Over the past 24 hours, bitcoin has declined by 2.1% to $75,633, while ether has fallen by 3.4% to $2,244. This downward trend is attributed to the recent surge in Brent crude oil prices, which have reached a four-year high of $126.41 per barrel.
The escalation of tensions with Iran, coupled with reports of potential military action, has led to a significant increase in oil prices. As a result, the global benchmark for oil has experienced a nine-day winning streak, with prices increasing by over 100% year-to-date.
The cryptocurrency market has been affected by this trend, with most major coins experiencing losses. However, dogecoin has bucked this trend, rising by 3.8% on the day and 10.1% on the week. The current market volatility has been exacerbated by the surge in oil prices and the hawkish stance of the Federal Reserve, leading to a decline in demand for fixed-income assets. The resilience of bitcoin is being tested, as it has struggled to break above the $80,000 level despite the ongoing conflict.
According to Fernando Lillo, director at exchange Zoomex, a break above $80,000 would require a resolution to the Middle East conflict and a subsequent drop in oil prices. Lillo also suggested that a potential lifting of restrictions in the region and lower oil prices could trigger an influx of capital into risk assets, paving the way for bitcoin to consolidate above $80,000 and move toward $85,000.