Bitcoin (COIN:BTCUSD) edged lower during Asian trading on Friday, though it continued to hold above the important $70,000 threshold as investors remained cautious amid escalating tensions in the Middle East. Rising oil prices linked to the conflict have added uncertainty around global inflation and the future path of interest rates.
The largest cryptocurrency by market value was down 3.1% to $70,182.6 at 00:56 ET (05:56 GMT). Earlier in the week it briefly climbed past $74,000, leaving the token still set for a roughly 7% weekly increase.
Iran conflict and oil surge dominate sentiment
Market sentiment in the crypto sector remained delicate as geopolitical tensions intensified following U.S. and Israeli strikes on Iran, which prompted retaliatory drone and missile attacks across the region. The conflict has now entered its seventh day.
The situation has also raised concerns about shipping through the Strait of Hormuz, a critical energy corridor through which about 20% of the world’s oil supply normally passes. The risk of disruption has rattled commodity markets.
Crude prices have climbed sharply since the conflict escalated, rising more than 16% this week as traders worry that prolonged fighting could interfere with global oil supplies.
The rally in oil has revived concerns about another wave of global inflation, complicating the outlook for central bank policy. Investors have started to scale back expectations that the U.S. Federal Reserve will cut interest rates in the near term, as higher energy prices could keep inflation elevated.
Shifting rate expectations have helped lift the U.S. dollar this week, creating pressure for a range of risk-sensitive assets. The stronger greenback has also weighed on commodities, with gold heading for a weekly drop despite heightened geopolitical uncertainty.
Even so, bitcoin has demonstrated relative resilience by staying above the psychologically significant $70,000 level.
Altcoins also move lower
Most major altcoins declined on Friday as the cautious tone in broader markets persisted.
Ethereum, the second-largest cryptocurrency, dropped 3% to $2,069.03.
XRP, the third-largest digital asset, fell 1.8% to $1.39.
Solana slipped 1.6%, while Cardano and Polygon each lost about 2.5%.
Among meme-based cryptocurrencies, Dogecoin declined 1.8%.