The resurgence of the Iran war premium has taken a toll on the cryptocurrency market. Over the past 24 hours, bitcoin has fallen by 2.1% to $75,633, while ether has dropped by 3.4% to $2,244.
This downturn comes as Brent crude oil prices have surged by 7.1% to $126.41 per barrel, the highest level in four years, following reports that President Trump is being briefed on potential military options against Iran. The escalation of tensions in the region has resulted in a war premium, which refers to the portion of an asset's price driven by conflict risk rather than supply-demand fundamentals.
As a result, risk assets across the board have seen declines, with the Nasdaq 100 futures and European equities experiencing losses. The only notable exception is dogecoin, which has seen a 3.8% increase in value. The current situation has put bitcoin's resilience to the test, 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 a resolution to the Middle East conflict and a subsequent drop in Brent crude oil prices.
Lillo suggests that a potential lifting of restrictions in the region and lower oil prices could trigger a relief rally, paving the way for bitcoin to consolidate above $80,000 and move toward $85,000.