Bitcoin fell by as much as 2.2% on Monday after failing to sustain gains above $84,000, as escalating tensions involving Russia, Ukraine and Iran pushed oil prices toward a one-month high.
Bitcoin (BTC) had climbed to $84,254 on Bitstamp before reversing its gains. According to TradingView data, the decline came amid concerns over global energy supplies following reports of continued attacks on energy infrastructure in Ukraine and an oil tanker catching fire in the Strait of Hormuz.
Oil prices surged in response to the developments, with West Texas Intermediate (WTI) crude rising above $94 per barrel and Brent crude reaching $107.25, its highest level since September 16. Higher oil prices have raised concerns about inflation and their potential impact on financial markets.
The market movements come ahead of key US inflation data, with the Consumer Price Index (CPI) due Wednesday and the Producer Price Index (PPI) scheduled for Thursday. Rising energy costs could influence inflation figures and shape expectations about the US economic outlook.
However, former Goldman Sachs chief currency strategist Robin Brooks argued that oil markets had priced in excessive geopolitical risk, pointing to improving shipping volumes through the Strait of Hormuz. He noted that oil flows from the Persian Gulf had recovered compared with levels recorded during the peak of the conflict in March and April.
Meanwhile, Bitcoin options markets showed a cautious outlook among traders, according to trading firm QCP Capital. Its analysis indicated that traders were maintaining defensive positions while keeping the possibility of an upward breakout open.
Market analyst Rekt Capital identified $83,400 as a key resistance level for Bitcoin. Data from CoinGlass also showed substantial sell-side liquidity around $84,500, while buying interest was building near $82,000.
QCP Capital said a sustained move above $87,000 could bring the $94,000 level into focus. However, Bitcoin’s near-term direction remains sensitive to geopolitical developments, oil prices and upcoming US inflation data.
