The resurgence of the Iran war premium has negatively impacted the cryptocurrency market. Over the past 24 hours, bitcoin has declined by 2.1% to $75,633, while ether has dropped 3.4% to $2,244. This downturn is attributed to the significant increase in Brent crude oil prices, which have reached a four-year high of $126.41 per barrel.
The rise in oil prices is a result of reports that President Donald Trump is being briefed on potential military options against Iran, leading to a war premium being factored into asset prices. As a result, risk assets across the board are experiencing a decline, with the Nasdaq 100 futures and European equities also seeing losses.
The only exception in the top 10 cryptocurrencies is dogecoin, which has seen a 3.8% increase. The dollar has gained value, while bonds have slid, leading to a surge in Treasury 10-year yields.
Bitcoin's ability to withstand the early stages of the war 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 $80,000 would require the war premium to unwind and a resolution to the Middle East conflict.
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.