The crypto market came under pressure on Monday after the US Navy began enforcing a blockade of Iranian ports. The move pushed Brent crude above $103 a barrel and kept bitcoin close to the key $70,000 level.
Oil prices jumped sharply after the blockade was confirmed. Brent rose more than 7 percent, while WTI also climbed strongly as traders reacted to the risk of tighter global supply.
Bitcoin traded around $70,600 to $71,000 during the market reaction. Even with the new escalation, the world’s biggest cryptocurrency managed to stay above the $70,000 support level.
That matters because bitcoin fell much harder earlier in the conflict. When Iran first closed the Strait in late February, bitcoin dropped into the low $60,000s before later recovering.
Analysts say rising oil prices can hurt bitcoin and other risk assets. If oil stays above $100, inflation could remain high, which may make it harder for the Federal Reserve to cut interest rates soon.
That would likely keep pressure on risk markets such as tech stocks and crypto. Bitcoin has often moved in line with those assets during periods of geopolitical stress and rising energy prices.
Investors are now watching three major events. These are the April 22 ceasefire deadline, the late April Senate work on the CLARITY Act, and the Federal Reserve meeting on April 28 and 29.
If oil keeps rising and moves above $110, some analysts believe bitcoin could fall toward $65,000. But if tensions ease before April 22, crypto markets could rebound quickly again.
