Bitcoin drops to seven-day low as oil surges on Iran war concerns

Bitcoin fell to its lowest price in a week during early Asia trading, as oil prices surged due to the escalating war with Iran.

Risk-off sentiment driven by inflation fears helped push the original cryptocurrency down as much as 2.36% to $65 633 on Monday, coinciding with a spike in Brent crude prices, which touched $118.73 a barrel — the highest since June 2022. Bitcoin was trading above $66 000 at 10:30 a.m. in Singapore.

“The geopolitical situation in the Middle East has moved beyond a single military event into sustained economic disruption,” said Hayden Hughes, managing partner at Tokenize Capital. He added that investors are bracing for the latest US Consumer Price Index numbers, scheduled for release this week.

“The market is positioning defensively ahead of what is likely a hot print given elevated energy costs,” Hughes said.

Asian shares also slumped, with South Korea’s Kospi falling as much as 8.1%. The US dollar, the haven of choice amid inflationary pressure, rose against nearly all its peers. Treasuries sold off, as well, with benchmark US 10-year yields turning higher for the year.

Bitcoin’s drop was “surprisingly modest compared to, say, Nasdaq futures or the Kospi, which tells me there are very little leveraged long positions left,” said Damien Loh, chief investment officer at Ericsenz Capital.

The overall mood remained bearish as exchange-traded fund flows turned negative again at the end of last week. US-listed spot Bitcoin ETFs have seen nearly $6 billion in net outflows since November, according to data compiled by Bloomberg. This indicates that institutional capital continues to exit rather than wait on the sidelines, Hughes said.

Hughes said $64 000 is the immediate downside level to watch for Bitcoin, while a break below that would take the next support level to $61 000. On the upside, $68 000 is the next resistance level, he added.

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