Bitcoin lost ground in Asia on Monday as oil prices spiked after the US launched fresh attacks on Iran, reviving inflation fears.
The original cryptocurrency fell as much as 2.6% to $62,478 as of 9 a.m. in London. The move took Bitcoin back below its 200-week moving average, a technical level that can signal a prolonged bear market. Second-largest token Ether also slid 2.6%.
“The selloff is following weaker US equity futures trading and the spike in oil prices on the back of increasing Iran tensions,” said Richard Galvin, executive chairman at crypto investment firm DACM.
Renewed hostilities between the US and Iran have heightened concern that rising oil prices could rekindle inflation and push up interest rates, which tend to draw money away from risk assets such as Bitcoin. US consumer-price data and testimony from Federal Reserve Chairman Kevin Warsh this week will be watched closely for clues on the US central bank’s policy outlook.
“A hotter-than-expected CPI print would likely bolster expectations of a Fed rate hike before year-end, which would weigh on Bitcoin,” said Tony Sycamore, an analyst at IG Australia. An in-line or softer outcome would lend support to Warsh’s previous comments that inflation pressures are easing, he added.
The US launched fresh missile attacks against Iran on Sunday in what has become a pattern of strikes and counterstrikes by Washington and Tehran, as the two sides issued conflicting declarations over whether the Strait of Hormuz is open to shipping. Brent crude climbed 4.4% to above $79 a barrel as the escalation stoked concerns over potential supply disruptions.
Still, last week saw $197.4 million of net inflows into US-listed spot Bitcoin exchange-traded funds, the first positive weekly flow in nine weeks.
This report is auto generated from the Bloomberg news service. ThePrint holds no responsibility for its content.