Bitcoin and most cryptocurrencies withdrew on Tuesday while geopolitical risks intensified before the next interest rate decision of the Federal Reserve.
Bitcoin (BTC) went from $ 108,915 this week to an intrajournial hollow of $ 105,500. Ethereum (ETH) fell by more than 2.2%, while the total market capitalization of all cryptocurrencies decreased to 3.28 billions of dollars.
Additional data show that cryptographic liquidations have increased 25% in the last 24 hours to more than $ 359 million. Some of the highest laggards were coins like SPX6900 (SPX), Immuble (IMX), Fartcoin (Fartcoin), Pepe (PEPE) and Worldcoin (WLD).
The current sale in the cryptography industry reflected that of the stock market, because the Dow Jones and Nasdaq 100 indices dropped by 165 and 100 points, respectively.
The prices of bitcoin and cryptography fell among the growing fears of a broader war in the Middle East increased. These concerns intensified after Donald Trump urged Tehran residents to evacuate, reporting that he anticipates bombing in the coming days.
The fears also degenerated after two oil tankers collided and caught fire near the Hormuz Strait, a critical strangulation point for millions of barrels of oil per day. Consequently, crude oil prices have rebounded, Brent and West Texas Intermediate earning more than 2.2%.
The growing concerns concerning the crisis in the Middle East are a big reversal of the optimism of Monday which pushed the prices of the cryptography higher. Optimism was due to the media relationships that Iran was looking for talks to end the conflict.
Impact of the Middle East crisis on bitcoin and cryptography prices
The climbing of the crisis has an impact on bitcoin, altcoins and other risk assets due to its effects on crude oil and inflation.
Brut and shipping costs have already jumped in recent days. Data show that the global container index has reached $ 3,543, its highest point since January.
Higher energy and transport costs contribute to the rise in inflation, which could prevent the federal reserve from reducing interest rates as requested by Donald Trump. Historically, cryptography prices tend to work better when the Fed reduces rates or signaling future cuts.
However, history shows that bitcoin and other cryptocurrencies often bounce back after major geopolitical or macroeconomic shocks. For example, in March 2020, Bitcoin plunged more than $ 10,000 to less than $ 4,000 after Covid was declared pandemic, to come together to a record later that year.
More recently, Bitcoin fell to $ 74,457 in April after the speech of the Liberation Day Then bounced to a new record in May. Bitcoin is also considered an asset in Haven Sure, with blackrock data showing that it surpasses actions after major events.
