The resurgence of the Iran war premium has had a significant 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.
Other major cryptocurrencies, including XRP and Solana, have also experienced losses. The current surge in oil prices, which has reached a four-year high, has been fueled by reports of potential military action against Iran. This has led to 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 have been experiencing losses across the board, with the Nasdaq 100 futures and European equities also declining.
The only exception has been dogecoin, which has risen by 3.8% over the past 24 hours. The dollar has gained, while bonds have slid due to the surge in oil prices and a hawkish Fed. Bitcoin's ability to withstand the early stages of the war is being tested, and it remains to be seen whether it can break above the key $80,000 level.
According to Fernando Lillo, director at exchange Zoomex, any break above $80,000 will require the war premium to unwind, which would necessitate a resolution to the Middle East conflict and a subsequent drop in Brent crude oil prices below $100 per barrel.