The resurgence of the Iran war premium has taken a toll on 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, amidst a 7.1% surge in Brent crude prices to $126 a barrel, a four-year high. This escalation in oil prices is attributed to reports that President Trump is being briefed on military options for Iran, sparking fears of a prolonged conflict. The Strait of Hormuz, a crucial oil passage, has been effectively shut down since the war began, leading to a significant war premium being factored into oil prices.
As a result, the global benchmark for oil has been on a nine-day winning streak, with prices increasing over 100% year-to-date. The cryptocurrency market has not been immune to this trend, with most major coins experiencing declines. However, dogecoin has bucked this trend, rising 3.8% on the day and 10.1% on the week.
The surge in oil prices has also had a ripple effect on other markets, with risk assets declining across the board. The dollar has gained, while bonds have slid, and Treasury 10-year yields have held near their highest levels since July. 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, any break above this level would require a resolution to the Middle East conflict and a subsequent drop in oil prices. Lillo also flagged the possibility of the Trump administration lifting the naval blockade of Iran, which could trigger a relief rally and pave the way for bitcoin to consolidate above $80,000.