Bitcoin drops 2.2% as Ukraine, Iran strikes send oil toward one-month high
Bitcoin price action stayed rangebound after failing to sustain above $84,000 into the Wall Street open on rising oil prices.
Bitcoin (BTC) gave back early-week gains into Monday’s Wall Street open as doubts compounded over a Russia-Ukraine “energy ceasefire.”
Key points:
- Bitcoin reached $84,250 before falling 2.2% amid market nerves over oil supplies and the Russia-Ukraine “energy ceasefire.”
- Analysis saw too much “risk premium” priced in to oil markets in the face of improving shipping volumes.
- BTC options traders positioned “defensively” while keeping $90,000 and above on the table.
Data from TradingView showed BTC/USD reaching $84,254 on Bitstamp, its highest level since Wednesday, before dropping up to 2.2%.
BTC/USD one-hour chart. Source: Cointelegraph/TradingView
The retreat came as Ukraine president Volodymyr Zelenskyy accused Russia of continuing to target energy infrastructure despite US president Donald Trump announcing a moratorium on such strikes. Elsewhere, Iran reported that an oil tanker had been hit and was ablaze in the Strait of Hormuz.
Oil prices reacted sharply, with WTI crude spiking past $94 per barrel and Brent crude reaching $107.25 — its highest since Sept. 16.
CFDs on Brent crude oil four-hour chart. Source: Cointelegraph/TradingView
The increases come with markets already on edge ahead of key US inflation data in the form of Consumer Price Index (CPI) and Producer Price Index (PPI), due out on Wednesday and Thursday respectively. As Cointelegraph reported, CPI has proven particularly sensitive to rising oil prices.
Commenting, Robin Brooks, former chief FX strategist at Goldman Sachs, argued that oil markets had priced in “too much risk premium,” pointing to improving Hormuz transit volumes.
“Oil volumes out of the Persian Gulf are around 13 mb/d compared to a high of 16.5 mb/d a few weeks ago. This is still way better than the height of the war in March and April, but oil prices are back to their highs,” he noted in a blog post on the day.
Looking ahead to possible BTC price targets, trading company QCP Capital reported duality in Bitcoin options markets, with “defensive” positioning combined with traders considering an upside breakout to still be possible.