- The increase in oil prices is an important factor affecting inflation and can reduce the growth of the world economy.
- Bitcoin has become highly correlated with the stock market, showing sensitivity to geopolitical instability.
Bitcoin (BTC) fell after last week’s brief rally as rising oil prices weighed on Asian stock markets on March 9. In the last 24 hours, the price decreased by about 1.87% and reached $66,010.
It also represented a 10% decline from its recent peak of $73,500, which was recorded on March 5. This pullback brought Bitcoin back to the point it had witnessed before the brief rally. The analyst of Zeus Research, Dominic John, noted that this decrease to 66 thousand dollars is mainly influenced by the macroeconomic return.
He also added that the increase in geopolitical risk, mainly the lack of de-escalation in the Middle East, has led the markets to a more dangerous situation, while the rise in oil prices will contribute to the problem of inflation and the worsening of the global financial situation.
As tensions in the Middle East continue, crude oil prices have soared to $110 a barrel, up 22% on the day and 72% over the past month, according to Trading Economics.
On March 8, US President Donald Trump said that the short-term increase in oil prices is a small price to pay, and prices will stabilize after the Iranian nuclear threat is eliminated.
Association with the stock market
Jeff May, COO at BTSE, said, “Rising oil prices are an important factor affecting inflation and can reduce global economic growth, given that it is used as a material for many products in various industries, and this issue is what affects Bitcoin.”
Bitcoin prices are said to be stronger than in recent bear markets, and this may be the result of a greater composition of institutional holders.
Rising oil prices weighed heavily on Asian stock markets, mainly in economies that are heavily dependent on crude imports. Japan’s Nikkei rose 7% after the market opened on Monday, while South Korea’s KOSPI fell 7.9%.
Hong Kong’s Han Seng fell 2.7% and the Shanghai Composite fell 1.4%. In the past few years, Bitcoin has become highly correlated with the stock market, showing sensitivity to geopolitical instability.
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