Bitcoin Drops 2.6% as Iran Tensions Push Oil Above $79

Bitcoin (BTC-USD) declined in Asian trading on Monday as renewed conflict between the US and Iran drove oil prices higher and raised fresh concerns about inflation and interest rates. The cryptocurrency fell as much as 2.6% to $62,478 by 9 a.m. in London, pushing it below its 200-week moving average, a technical level that may indicate a prolonged bear market. Ether, the second-largest cryptocurrency, also dropped 2.6%. Richard Galvin, executive chairman of DACM, a crypto investment firm, said the selloff followed weaker US equity futures and the sharp rise in oil prices as tensions with Iran intensified.The US launched fresh missile attacks against Iran on Sunday as Washington and Tehran continued a pattern of strikes and counterstrikes. The two countries also issued conflicting statements over whether the Strait of Hormuz remained open to shipping. Brent crude climbed 4.4% to above $79 a barrel, with investors concerned that further escalation could disrupt oil supplies, revive inflation pressures, and push interest rates higher. These conditions may weigh on Bitcoin because higher rates tend to attract capital away from risk assets.Investors are now watching upcoming US consumer-price data and testimony from Federal Reserve Chairman Kevin Warsh for potential signals about the central bank's policy outlook. Tony Sycamore, an analyst at IG Australia, said a hotter-than-expected inflation reading could strengthen expectations for a Federal Reserve rate increase before year-end and place additional pressure on Bitcoin. He added that an in-line or softer reading could support Warsh's earlier comments that inflation pressures are easing. Despite the latest decline, US-listed spot Bitcoin exchange-traded funds attracted $197.4 million in net inflows last week, marking their first positive weekly flow in nine weeks and suggesting that investor demand has not disappeared entirely.