Bitcoin held steady against the US dollar on Tuesday morning, posting a slight gain after a sharp sell-off over the weekend amid continued escalation between the United States and Iran.

The world’s largest cryptocurrency by market value had fallen to nearly $63,000 during the weekend, as investors reduced exposure to high-risk assets and shifted toward safe havens such as gold and the US dollar. It later recovered part of its losses to trade just below the $67,000 level.

Since the beginning of the year, Bitcoin has lost around one-third of its value, while the total cryptocurrency market capitalization has declined by about $350 billion compared with levels a month ago, according to data from CoinMarketCap.

Market turbulence this week followed US strikes on Iran, which reportedly resulted in the death of Iran’s Supreme Leader Ali Khamenei, prompting Tehran to launch a series of attacks on US bases across the Middle East.

The escalating conflict has heightened global economic uncertainty, particularly after the closure of the Strait of Hormuz, one of the world’s most important oil transit routes, driving crude prices higher. Rising energy costs are fueling concerns that inflation could accelerate, especially in countries heavily dependent on oil and gas imports.

Ethereum, the cryptocurrency tied to the Ethereum network, rose about 0.9% to trade just below the $2,000 level.

Meanwhile, shares of crypto-related companies did not mirror the rebound in pre-market US trading, with Coinbase and Strategy — the software firm holding large Bitcoin reserves — appearing set to open the session lower.

Oil prices extended their strong rally on Tuesday, with benchmark crude contracts rising about 8% and marking a third consecutive session of gains, as the conflict between the United States and Israel on one side and Iran on the other widened, disrupting fuel shipments and intensifying fears of further oil and gas supply outages from the Middle East.

Brent crude futures climbed $6.05, or 7.8%, to $83.79 per barrel by 11:43 GMT, after touching their highest level since July 2024 at $85.12. US West Texas Intermediate crude rose $5.31, or 7.5%, to $76.54 per barrel, having earlier reached its highest level since June at $77.53.

The US-Israeli air campaign against Iran has expanded since Israel’s initial strikes on Saturday, with Israel targeting Lebanon while Iran responded with attacks on energy infrastructure in Gulf states and oil tankers in the Strait of Hormuz, through which roughly one-fifth of global oil and liquefied natural gas supplies pass.

Oil tankers and container ships have avoided the strait after insurers withdrew coverage for vessels operating in the region, as global shipping costs for oil and gas surged. Fears escalated further after Iranian media reported that a senior Islamic Revolutionary Guard Corps official announced the closure of the Strait of Hormuz and warned that any vessel attempting to transit would be targeted.

Analysts at ING said concerns extend beyond oil flows through the strait, with the greater risk being further Iranian attacks on regional energy facilities, which could result in more prolonged supply disruptions.

In additional developments, official media reported that authorities in the United Arab Emirates were dealing with a serious fire at Fujairah port, a major oil storage and export hub. Meanwhile, shipments of Iraqi Kirkuk crude from Turkey’s Ceyhan port were halted, according to a shipping industry source.

Since the onset of hostilities, oil and gas facilities across several countries have either been shut down due to direct damage or as a precautionary measure. Qatar halted liquefied natural gas production, Israel suspended output at some gas fields, Saudi Arabia shut its largest refinery, and production in Iraq’s Kurdistan region nearly came to a standstill.

Disruptions have also spread to gas markets, with Dutch benchmark gas futures, UK gas prices, and LNG prices in Europe and Asia all surging.

Analysts expect oil prices to remain elevated in the coming days as markets assess the fallout from military escalation. Bernstein raised its 2026 Brent price forecast to $80 per barrel from $65 but said prices could climb to between $120 and $150 if the conflict persists in a prolonged and severe manner.

Refined product contracts also surged amid risks to Middle Eastern refining facilities. US ultra-low sulfur diesel futures jumped more than 11% to $3.22 per gallon after hitting a two-year high on Monday, while gasoline futures rose 5% to $2.49 per gallon. In Europe, gasoil futures climbed 13% to $997.80 per metric ton, following an 18% surge in the previous session.

Gold prices declined in European trading on Tuesday for the first time in five sessions, retreating from a five-week high due to corrective activity and profit-taking, alongside broad strength in the US dollar against a basket of global currencies.

With the probability of a US rate cut in March fading, traders are closely watching a series of key US labor market data releases this week, which the Federal Reserve heavily relies on in determining its monetary policy path for the year.

Price Overview

• Gold prices today: Gold fell 1.8% to $5,226.51, down from the session open at $5,322.07, after touching a high of $5,379.94.

• At Monday’s settlement, gold rose 0.8%, marking a fourth consecutive daily gain and hitting a five-week high of $5,419.37 per ounce, following US-Israeli strikes on Iran.

US Dollar

The US dollar index rose 0.65% on Tuesday, extending gains for a second straight session and reaching a one-and-a-half-month high of 99.18, reflecting continued strong performance of the US currency against major and minor peers.

As is well known, a stronger US dollar makes dollar-denominated gold less attractive to buyers holding other currencies.

The sustained rally in the dollar comes amid safe-haven buying as the Iran war enters its fourth day, with mounting fears of a broader regional escalation. Rising energy prices are adding further downside pressure on the global economy.

US Interest Rates

• Federal Reserve Governor Christopher Waller said last week he is open to keeping interest rates unchanged at the March meeting if February employment data indicates the labor market has “stabilized” after weak performance in 2025.

• According to CME Group’s FedWatch tool, markets price a 96% probability that US interest rates will remain unchanged in March, while the odds of a 25-basis-point cut stand at 4%.

• Investors are closely monitoring additional key US labor market data this week, particularly the monthly jobs report scheduled for release on Friday, to reassess these expectations.

Gold Outlook

KCM Trade Chief Market Analyst Tim Waterer said the scope and duration of the conflict remain largely unclear, and as long as that uncertainty persists, gold continues to capture the bulk of safe-haven demand.

Waterer added that gold prices might have risen further if not for the strengthening US dollar since the escalation of the conflict. Inflation concerns are currently front and center for traders, given the direction of oil prices and reduced shipping volumes through the Strait of Hormuz.

SPDR Gold Trust

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, were little changed on Monday, keeping the total at 1,101.33 metric tons — the highest level since April 21, 2022.

The euro weakened in European trading on Tuesday against a basket of global currencies, extending losses for a second consecutive session against the US dollar and hitting a six-week low, as investors continued to favor the greenback as a safe-haven asset amid escalating geopolitical tensions and intensifying military confrontations between the United States and Israel on one side and Iran on the other.

The single currency is also pressured by concerns over rising global energy prices due to the Iran war, which could hinder the European Union’s ability to replenish fuel reserves as inventories decline to record lows.

Later today, traders await the release of euro area headline inflation data for February, which is expected to provide stronger clues on the European Central Bank’s interest rate path this year.

Price Overview

• EUR/USD fell 0.2% to $1.1662, the lowest level since January 20, down from the session open at $1.1687, after touching a high of $1.1707.

• The euro ended Monday down 1.1% against the dollar, marking its largest daily loss since July 30, 2025, amid fallout from the Iran war.

US Dollar

The US dollar index rose 0.2% on Tuesday, extending gains for a second straight session and reaching a one-and-a-half-month high of 98.77, reflecting continued strong performance of the US currency against a basket of major and minor peers.

The ongoing rally is driven by safe-haven demand as the Iran war enters its fourth day, with mounting fears of a broader regional escalation. Rising energy prices are adding further negative pressure on the global economy.

Developments in the Iran war

• President Donald Trump said the war could last for weeks and that it remains unclear who would take control in Iran following the death of Supreme Leader Ayatollah Ali Khamenei.

• Israeli Prime Minister Benjamin Netanyahu sought to calm concerns over the timeline, telling Fox News it would not be an “endless war.”

• Saudi Arabia’s defense ministry said in a post on X, citing a preliminary assessment, that two drones targeted the US embassy in Riyadh, causing a limited fire and some damage.

European Interest Rates

• Money markets price the probability of a 25-basis-point rate cut by the European Central Bank in March at around 25%.

• Traders have revised expectations from keeping rates unchanged throughout the year to at least one 25-basis-point cut.

Inflation in Europe

To reassess expectations for rate cuts this year, investors will focus later today on euro area headline inflation data for February, which will indicate the extent of inflationary pressures facing ECB policymakers.

At 10:00 GMT, annual euro area CPI is expected to rise 1.7% in February, unchanged from the previous reading, while core inflation is forecast at 2.2%, in line with the prior figure.

Euro outlook

At FX News Today, we expect that if inflation data comes in softer than currently anticipated, expectations for ECB rate cuts this year will increase, implying further downside pressure on the euro in the foreign exchange market.