Bitcoin drops below $70,000 as oil rises anew amid renewed inflation concerns

Bitcoin fell below the $70,000 level on Thursday but remained relatively supported as investors turned cautious following another surge in oil prices amid the escalating conflict in the Middle East.

The world’s largest cryptocurrency declined 0.7% to trade around $69,454 as of 02:14 a.m. New York time, with Bitcoin appearing to move within a narrow range around the $70,000 level while markets assess geopolitical developments.

Oil approaches $100 again, raising inflation concerns

Oil markets have been the main driver of risk appetite across financial markets. Brent crude climbed back above $100 per barrel after retreating from a peak near $120 reached on Monday, its highest level in about two years.

The latest escalation in the Middle East followed reports of attacks on two fuel tankers in Iraqi territorial waters, along with strikes targeting commercial vessels passing through the Strait of Hormuz, one of the world’s most important oil shipping routes.

About one-fifth of global oil supplies pass through the strait, while tanker traffic there has dropped significantly due to security concerns.

Rising energy prices have revived fears of global inflation at a time when central banks were preparing to consider easing monetary policy. Analysts believe that if oil prices remain above $100 for an extended period, it could complicate the Federal Reserve’s path toward rate cuts and put pressure on risk-sensitive assets such as cryptocurrencies.

In recent months, Bitcoin has often moved in tandem with risk assets, as traders worry that a new inflation shock could reduce liquidity across financial markets.

Investors are also awaiting important US economic data that could provide signals about the future path of monetary policy, including weekly jobless claims due later on Thursday and the Personal Consumption Expenditures (PCE) price index — the Federal Reserve’s preferred inflation gauge — scheduled for release on Friday.

Limited moves in other cryptocurrencies

In the broader crypto market, most alternative coins moved only slightly amid the risk-off environment.

Ethereum, the world’s second-largest cryptocurrency, rose 0.2% to $2,027.84, while Ripple, the third-largest digital currency, fell about 1% to $1.37.