Bitcoin (BTC) slipped after the last week’s brief rally, as a surge in oil prices influenced Asian equity markets on March 9. In the last 24 hours, the price slipped around 1.87% and stood at $66,010.
It also showed a 10% drop from the latest peak of $73,500 noted on March 5. This pullback took bitcoin back to the point where it was witnessed before the brief surge. An analyst at Zeus Research, Dominick John, noted that this slip to $66k is mainly influenced by macro-driven pullback.
He further added that increased geopolitical risk, mainly the absence of de-escalation in the Middle East, took markets into a more risk-off posture, while increasing oil prices are adding to inflation issues and tightening global financial conditions.
Because of sustaining tensions in the Middle East, the price of crude oil increased to cross $110 per barrel, surging 22% on the day and 72% in the last month, as per Trading Economics.
On March 8, U.S. President Donald Trump stated that a short-term increase in oil prices is a very small price to pay, mentioning that prices would stabilise once the destruction of the Iranian nuclear threat is terminated.
The Association with Stock Market
‘The increasing price of oil is a prominent factor in influencing inflation and could take the global economic growth down, given that it is used as an input for a lot of products across various industries, and this issue is what is influencing bitcoin to dip,’ mentioned Jeff Mei, COO at BTSE.
That being mentioned, the price of bitcoin has proved to be stronger than in last bear markets, and this could be a result of the bigger makeup of institutional holders this time around.
The increase in the prices of oil has impacted prominent Asian stock markets, mainly in economies heavily dependent on crude imports. Nikkei from Japan has surged 7% after market open on Monday, while South Korea’s KOSPI has dipped 7.9%.
Hang Seng from Hong Kong has slipped 2.7%, and the Shanghai Composite Index has slipped 1.4%. In the past few years, Bitcoin has become highly associated with the equities market, showing sensitivity to geopolitical volatility.
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