Due to tensions between the US and Iran and the closure of the Strait of Hormuz, oil prices have risen to $120, while Bitcoin (BTC) and altcoin prices are falling.
At this point, Bitcoin has fallen to around $66,000, while the largest altcoin, Ethereum (ETH), has dropped below $2,000.
After a sharp rebound last week, cryptocurrency markets have reversed course again, a move analysts attribute to the rise in oil prices.
According to a CryptoQuant analyst, BTC is under downward pressure due to rising oil prices.
Oil is Negatively Affecting Bitcoin!
Darkfost, a CryptoQuant analyst, said Bitcoin is under downward pressure due to rising oil prices triggered by escalating tensions in the Strait of Hormuz.
The analyst noted that international oil prices have increased by more than 60% since the beginning of the year.
The Strait of Hormuz plays a vital role in the global crude oil supply. With approximately 20% of the world’s daily oil exports and 35% of its maritime transport passing through it, the Strait of Hormuz is at the center of a crisis that directly fuels market supply concerns. Therefore, any potential blockade or transportation restrictions could have an immediate impact on crude oil prices.
“International oil prices continue to rise as tensions around the Strait of Hormuz intensify. Oil prices have increased by more than 60% this year, demonstrating the strong impact of geopolitical risks on the energy market.”
At this point, the analyst said that the increase in oil prices is likely to increase inflationary pressures and volatility in financial markets, because global financial markets are highly sensitive to energy supply shocks.
In conclusion, the analyst stated that such an environment is unfavorable for a volatile and risky asset like Bitcoin.
According to the analyst, historically, periods of increased oil price strength often coincide with BTC’s end-of-cycle phases, which is not a positive sign for the price. These moments also signal geopolitical tensions that negatively impact risk-taking or exposure to more speculative assets.
The analyst concluded that the Trump administration needed to act quickly to halt the rise in oil prices, warning that a lack of intervention could have a much larger and longer-lasting impact on financial and crypto markets.
*This is not investment advice.
