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Bitcoin declined in Asian trading on Friday but remained above the key $70,000 level, as investors stayed cautious amid escalating tensions in the Middle East and a surge in oil prices that is complicating the outlook for global inflation and interest rates.
The world’s largest cryptocurrency was down 3.1% at $70,182.6 by 00:56 ET (05:56 GMT), after briefly rising above $74,000 earlier in the week. Despite the pullback, Bitcoin remained on track for a weekly gain of around 7%.
Geopolitical tensions and oil rally weigh on sentiment
Market sentiment remained fragile as the conflict between the United States, Israel, and Iran entered its seventh day, following coordinated strikes on Iranian targets and retaliatory missile and drone attacks across the region.
The conflict has raised concerns about the security of shipping routes through the Strait of Hormuz, a vital energy chokepoint that typically handles about 20% of global oil supply.
As tensions escalated, oil prices surged sharply, climbing more than 16% this week amid fears that prolonged fighting could disrupt global energy supplies.
Inflation concerns complicate rate outlook
The spike in crude prices has reignited worries about a renewed wave of global inflation, which could complicate the policy outlook for major central banks.
Investors have already begun scaling back expectations for near-term interest rate cuts from the U.S. Federal Reserve, as higher energy costs may keep inflation elevated.
This shift in expectations helped support the U.S. dollar, which gained ground during the week and placed pressure on several risk-sensitive assets. A stronger dollar also weighed on commodities, with gold heading for a weekly decline despite geopolitical tensions.
Bitcoin shows relative resilience
Despite the broader risk-off environment, Bitcoin has shown relative resilience by maintaining levels above the psychologically important $70,000 threshold, suggesting that demand remains firm even as macroeconomic uncertainty rises.
Altcoins also move lower
The broader cryptocurrency market also weakened on Friday.
- Ethereum fell 3% to $2,069.03
- XRP dropped 1.8% to $1.39
- Solana slipped 1.6%
- Cardano and Polygon both declined 2.5%
Among meme tokens, Dogecoin lost 1.8%.
While cryptocurrencies remain sensitive to geopolitical developments and shifts in global monetary policy expectations, Bitcoin’s ability to hold above the $70,000 level indicates continued investor interest even amid heightened market uncertainty.
