Bitcoin lost value on the first trading day of the week due to the developments in global markets. The crypto market, which acted relatively isolated despite geopolitical developments over the weekend, changed direction with the reopening of traditional financial markets. Bitcoin price fell to $66,702 in the early hours, falling 1.1% in the last 24 hours. Pricing in the market accelerated as the economic consequences of the tension between the USA and Iran were evaluated on a broader scale.
Weekend Rise Was Not Permanent
During the short-term recovery on Sunday, Bitcoin rose to $68,000. However, this move was not permanent and the price returned to the middle $66,000 band seen before the attacks. Although crypto assets appeared to move independently of traditional markets throughout the weekend, selling pressure came to the fore with the re-pricing of global risk perception on Monday.
The general outlook for the market was mixed. Ethereum fell 2.5% to $1,967, Solana lost 4.1% to $84, and XRP lost 3.6% to $1.36. When the weekly performance was examined, it was seen that Solana had the weakest performance among major crypto assets, with a decline of 8.1%.
Oil Prices and Inflation Expectations Stand Out
Movements in traditional markets were decisive for the direction of crypto assets. After rising up to 13% at the opening, the Brent oil price stabilized around $77.50 and continued the day with an increase of 6.4%. This increase was recorded as one of the sharpest increases seen since the beginning of the Russia-Ukraine war in 2022.
Disruptions in the Strait of Hormuz, through which approximately one-fifth of the world’s oil supply passes, increased uncertainty in energy markets. In the same period, Asian stock markets fell by 1.4%, while US index futures fell by 0.7%. The ounce price of gold rose to $5,350 due to safe haven demand. The increase in energy costs has increased inflation expectations, strengthening the expectation that the US Federal Reserve may delay interest rate cuts.
Geopolitical Uncertainty Affects Crypto as a Risk Asset
Conflicting statements regarding the diplomatic process between the USA and Iran increased uncertainty in the market. While news about new negotiation initiatives was on the agenda, Iranian National Security official Ali Larijani made statements that the country was not open to negotiations. US President Donald Trump stated that military operations will continue until the goals are achieved.
BTSE operations director Jeff Mei recalled that Iran has been largely isolated from the global financial system for a long time and evaluated that downside risks may remain limited.
We think downside risks may be limited as Iran has been isolated from global financial markets for a long time. Although there are concerns about oil prices, the supply increase from OPEC and the USA may balance the prices.
It is evaluated that the direction of the market largely depends on whether the Strait of Hormuz will be reopened and how long it will take to complete the military targets in the region. In this environment of uncertainty, crypto assets continue to be traded as a risk asset sensitive to changes in global risk appetite.
