Bitcoin price briefly touched an intraday low of $65,727 on Monday, March 9, as market sentiment remained risk-off amid concerns surrounding rising oil prices and escalating tensions between the U.S. and Iran.
Summary
- Bitcoin price briefly fell towards the $65,000 support level as investors reacted to a spike in oil prices.
- The ongoing conflict between the U.S. and Iran has disrupted trade at the Strait of Hormuz, a global checkpoint for oil distribution.
According to data from crypto.news, Bitcoin (BTC) price fell 3.5% to an intraday low of $65,727 on Monday, extending its downturn for the fifth straight day and dropping nearly 11% in that period. The world’s largest crypto asset is down roughly 5% over the past month.
Bitcoin price fell as investors continued to diverge from risk assets amid geopolitical tensions and macro volatility.
The bellwether appears to be mimicking traditional equity markets. Notably, futures tied to traditional market indices such as the Dow Jones Industrial Average dipped 1,026 points to 46,696, while the S&P 500 and Nasdaq-100 dropped by 136 points and 440 points each before U.S. markets resumed.
Investor sentiment deteriorated as the ongoing military conflict between the U.S. and Iran successively led to a blockade at the Strait of Hormuz, a global chokepoint for oil distribution. This led to a sharp jump in oil prices. In fact, oil prices across the globe shot up above the $100 mark, the first time crude oil has surpassed this level in nearly four years.
Market instability in the region began after Israeli fighter jets struck several fuel depots and refineries in the region on Saturday, March 7. Subsequently, Iran retaliated with missile and drone strikes of its own on vessels and military bases in the Gulf region.
As market risk sentiment soured, investors are concerned about whether Bitcoin price will continue to decline in correlation with traditional equity markets. The bellwether has historically moved in tandem with equities, especially during periods of macro uncertainty.
Against the backdrop, investors are concerned that rising oil prices could reignite U.S. inflation jitters and a potential delay in interest rate cuts. A hawkish stance from the Federal Reserve could dampen liquidity, which has often acted as a major tailwind for risk assets such as Bitcoin.
Bitcoin fell to an intraday low of $65,000 support during the late U.S. trading hours on Sunday. This level has acted as a strong demand zone over the past few months, and the asset managed to rebound as it retraced part of its weekend losses.
At presstime, Bitcoin had recovered above $68,000. The quick recovery suggests that investors may have already soaked up the latest market shock.
