The ongoing conflict in Iran has led to a surge in oil prices, resulting in a decline in 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. Other major cryptocurrencies, including XRP and Solana, have also experienced significant declines.
The current geopolitical tensions have led to a 'war premium' being factored into asset prices, with Brent crude oil reaching its highest level in four years. This surge in oil prices has resulted in a decline in risk assets across the board, with the Nasdaq 100 futures and European equities also experiencing losses. The dollar has gained, while bonds have slid, as the increase in oil prices and a hawkish Fed have reduced demand for fixed income. Bitcoin's ability to withstand the early stages of the conflict 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 this level would require a resolution to the Middle East conflict and a subsequent drop in 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 towards $85,000.