The resurgence of the Iran war premium has led to a decline in cryptocurrency prices. Over the past 24 hours, bitcoin has fallen 2.1% to $75,633, while ether has dropped 3.4% to $2,244.
This downturn is attributed to the significant rise in Brent crude oil prices, which have reached a four-year high of $126.41 per barrel. The increase in oil prices is a result of reports that President Donald Trump is being briefed on potential military options against Iran, sparking fears of an escalation in the conflict.
As a result, the global benchmark for oil has been on a nine-day winning streak, with prices rising over 100% year-to-date. Other cryptocurrencies, including 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 Nasdaq 100 futures and European equities experiencing losses. The dollar has gained, and bonds have slid, as the rise in oil prices has 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 $80,000. 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 and frames it as a response to positive steps by Iran could trigger a relief rally and lead to an influx of capital into risk assets, potentially paving the way for Bitcoin to consolidate above $80,000 and move toward $85,000.