Bitcoin dipped below the $70,000 level for the first time in over a week, as stocks sank and energy prices surged following renewed attacks on energy infrastructure in the Middle East.
The world’s largest cryptocurrency fell as much as 2.7% to $69,308 on Thursday, extending a decline from the previous day, when Bitcoin saw its largest drop in three weeks. Other cryptocurrencies such as Ether, BNB and XRP also declined.
“Bitcoin has likely run out of steam in the short term after dropping nearly 5% over the past 24 hours, with a pullback toward $65,000, a possible outcome in the coming days,” said Robin Singh, chief executive officer of crypto tax platform Koinly. Price action is likely to remain between $65,000 and $75,000 in the coming weeks, he added.
Escalating tensions around the conflict in Iran have triggered a broad risk-off attitude across global markets, with Japanese equities suffering their longest slump since April and European equities falling across the board. Futures for the S&P 500 slipped after the US benchmark wiped out gains for the week in the previous session.
The moves followed Iranian attacks on a major liquefied natural gas site in Qatar, deepening concerns that the war in the Middle East will stoke inflation and hit growth. Brent prices surged to $115 a barrel on Thursday, while European natural gas rose as much as 35%.
“The spectre of stagflation is hovering, with the combination of rising prices and stagnating growth posing a real threat,” Susannah Streeter, chief investment strategist at Wealth Club, said in a note Thursday.
Bitcoin had touched a six-week high of almost $76,000 earlier in the week, as momentum appeared to recover temporarily. The token remains in positive territory over the last month, providing a rare bright spot while other macro assets have been subdued by the conflict, according to Joel Kruger, markets strategist at LMAX Group.
“It is possible that cryptocurrencies were simply unable to ignore the significant deterioration in external sentiment,” added Alex Kuptsikevich, chief market analyst at FxPro. “Overall, however, we maintain a more pessimistic view, anticipating the bear market will continue, with bulls likely to be beaten soon, not least due to macro factors.”
