Bitcoin (BTC-USD) fell sharply during Asian trading on Monday as escalating military tensions between the United States and Iran drove oil prices higher and revived concerns about inflation and interest rates.
The leading cryptocurrency declined as much as 2.6%, slipping to $62,478 by 9 a.m. London time—dropping below its 200-week moving average, a key technical indicator often associated with prolonged bearish trends. Ether (ETH-USD), the second-largest digital asset by market capitalization, mirrored Bitcoin’s losses with a 2.6% drop.
Richard Galvin, Executive Chairman of crypto investment firm DACM, attributed the selloff to weaker U.S. equity futures and a sharp spike in oil prices following intensified hostilities between Washington and Tehran. The U.S. launched new missile strikes against Iran on Sunday, continuing a cycle of retaliatory actions between the two nations. Conflicting statements also emerged regarding the status of the Strait of Hormuz, a critical global oil transit route.
Brent crude surged 4.4% to surpass $79 per barrel, stoking investor fears that further escalation could disrupt global oil supplies, rekindle inflationary pressures, and prompt central banks—including the U.S. Federal Reserve—to maintain or raise interest rates. Higher rates typically reduce appetite for riskier assets like cryptocurrencies.
Market participants are now closely monitoring upcoming U.S. consumer price index (CPI) data and scheduled testimony from Federal Reserve Chair Kevin Warsh for clues on future monetary policy. Tony Sycamore, an analyst at IG Australia, noted that a hotter-than-expected inflation reading could bolster expectations for a rate hike before year-end, adding downward pressure on Bitcoin. Conversely, an in-line or softer CPI report might support Warsh’s recent remarks suggesting inflation is easing.
Despite the price decline, investor interest in Bitcoin remains evident: U.S.-listed spot Bitcoin exchange-traded funds recorded $197.4 million in net inflows last week—their first positive weekly flow in nine weeks—indicating underlying demand has not vanished.