The war in the Middle East and the change of leadership in Iran caused considerable confusion in the markets, driving oil prices to levels not seen since the energy crisis of 2021-2022.
Investors are rightly running away from risk, and the growing inflation pressure is making the prospect of interest rate cuts in the United States more distant.
However, the crypto market is showing surprising resilience, a Bitcoin remains in consolidation. However, there is one a level you need to be especially careful with!
The oil market is going through a rollercoaster after Donald Trump’s comments. Threats to the cryptocurrency market due to the war with Iran
The election of Mojtaba Khamenei as the new Supreme Leader of Iran, which followed the recent assassination of his father, was perceived by markets as a clear signal of Persian reluctance to de-escalate the conflict.
The effects of this decision were quickly assessed by the raw materials market. At the opening of futures contracts, the price of Brent crude oil broke the barrier of USD 100, reaching at its peak USD 119 per barrel.
The last time the market saw these levels was early 2022. The blockade of the Strait of Hormuz and the suspension of production by key producers in the region have raised justified concerns about the stability of supply chains.
The G7 countries are trying to save the situation and, according to unofficial reports, they are considering releasing up to 400 million barrels from their strategic reserves, which would help cool down the situation.
Yesterday’s statement by Donald Trump, in which he stated that the end of the war with Iran is near, effectively pushed the price of oil below USD 88.50.
Prolonged logistics paralysis in the region will contribute to maintaining high prices of raw materials, which in turn will translate into high inflation, especially in the economies that will suffer the most from the lack of supplies.
This, in turn, will have a direct impact on the cryptocurrency market, as retail investors, faced with shrinking wallets, will be reluctant to take the risk of purchasing digital assets.
World stock exchanges in a difficult situation in the face of the conflict in the Middle East. Bitcoin a remedy for global problems?
Rising energy costs are bad news for equity and debt markets. The increase in risk aversion pushed up the US dollar index, which slightly corrected, similarly to Brent, after yesterday’s “intervention” by the US president.
US Treasury yields have shot up. The interest rate on 10-year bonds approached the key resistance level of 4.20%.
Higher yields mean that markets are pricing in the need to finance possible military spending and a longer fight against inflation.
As a result, investors revised their expectations towards the policy of the American central bank.
Currently, only one interest rate cut is estimated in 2026, which mainly affected the indexes of smaller capitalization companies, led by the Russell 2000 index, which is sensitive to financing costs.
Cryptocurrencies are regaining demand after a weak start to the year
Despite a clear sell-off on global stock exchanges in early March, cryptocurrencies are doing relatively well.
Bitcoin’s price rebounded from the level of USD 74,000 last week, but today it launched another attack to the level of USD 71,000.
Data from the derivatives market indicate a low level of open positions and negative financing ratios, which theoretically creates room for possible increases.
However, I suggest remaining relatively cautious, as last week’s outflows from ETF funds and the growing geopolitical risk may discourage institutional capital from increasing exposure to digital assets in the coming days.
What can crypto investors expect in the coming weeks?
The latest data on US PCE inflation will probably go unnoticed because the market is looking to the future and is already pricing in a new, more difficult macroeconomic scenario caused by rising oil prices.
Restrictive financial conditions caused by the Iran conflict may continue to significantly limit Bitcoin’s potential to designate a new ATH in the short term.
Long-term forecasts assume that prolonged geopolitical uncertainty may lead to an even deeper correction in the coming weeks, and a possible bottom for BTC may form in the range of USD 50,000 to USD 57,000.
Absolutely key level to observe is now $65,000the loss of which will likely mean hitting another low in this bear market.
The article does not constitute investment advice.
