Bitcoin fails to return above $65K after another oil spike

Bitcoin remains below the $65K mark amid renewed tensions around the Strait of Hormuz. At the time of writing, the largest cryptocurrency was trading around $64,299.

Meanwhile, Brent crude, after surging above $89 per barrel, rolled back to $87.66. The rise began as hopes for a swift resolution of the situation around the Strait of Hormuz faded.

Expensive oil again weighs on markets

For Bitcoin, the problem is not oil itself but the possible consequences of its appreciation. High energy prices can accelerate inflation in the US and other major economies.

If inflation picks up again, it will be harder for the Federal Reserve to lower interest rates. High rates usually work against risky assets: investors get good yields on bonds and are less eager to invest in cryptocurrencies.

That is why Bitcoin has so far been unable to confidently recover above $65K, despite rebound attempts. The market is also awaiting fresh US inflation data, which could change expectations regarding the Fed's next moves.

The $65K level remains important

During the day, Bitcoin dipped to around $63.7K, then recouped some losses. However, it has not managed to consolidate above $65K yet.

Further movement will largely depend on oil, the situation around the Strait of Hormuz, and US inflation. A new spike in energy prices could add pressure on cryptocurrencies, while a reduction in geopolitical tensions could bring back interest in risky assets.

Cryptocurrencies remain high-risk assets whose value can change dramatically in a short time.

Source: CoinDesk