SINGAPORE/NEW YORK: Cryptocurrency markets faced heavy selling on Wednesday. Rising tensions in the Middle East triggered a broader risk-off move across global markets.
Bitcoin fell below the $84,000 support level during the session. It reached an intraday low of $83,840 before recovering slightly.
The cryptocurrency later traded near $84,200. It was down around 1.5% over the previous 24 hours.
The market decline followed a sharp rise in global oil prices. Tehran announced that it had attacked commercial oil ships near the Strait of Hormuz.
The announcement pushed Brent crude futures above $101.50 per barrel. Higher oil prices raised concerns about renewed inflation pressures.
Investors responded by moving towards traditional defensive assets. The US dollar was among the assets that attracted stronger demand.
Energy Prices Put Pressure on Risk Assets
The latest market moves also affected global bond markets. The yield on 10-year US Treasury notes rose as high as 5.31%.
Higher bond yields can make riskier investments less attractive. Rising energy costs can also increase concerns about tighter financial conditions.
These developments placed pressure on cryptocurrencies and Asian stocks. Major US stock indexes, however, remained close to record levels.
Market strategists said investors were temporarily moving away from assets sensitive to liquidity. Cash and government bonds gained attention as defensive options.
The shift affected digital currencies across the market. Several major altcoins recorded sharper losses than Bitcoin.
Altcoins Record Larger Declines
Dogecoin suffered a decline of about 4.98% over the period. XRP also dropped around 2.56%.
Ethereum and Hyperliquid recorded losses ranging between 3% and 5%. The wider declines showed the pressure across the cryptocurrency market.
Data from derivatives tracker Coinglass showed extensive liquidations. More than $487 million in bullish crypto positions were reportedly wiped out.
The liquidations added further pressure to prices. They also reflected weaker short-term market momentum.
Bitcoin Faces Key Support Levels
Market analysts are now watching important support levels for Bitcoin. FxPro said sellers appeared to control the short-term market direction below $84,000.
A sustained decline below $83,000 could increase selling pressure. Technical models could then point toward the $80,000 level.
However, market conditions remain closely linked to global economic developments. Oil prices and bond yields could continue influencing investor sentiment.
Investors are also watching upcoming Federal Reserve meeting minutes. The minutes could provide clues about future monetary policy.
Markets will look for signs about the central bank’s response to inflation risks. New supply-side pressures could influence expectations about interest rates.
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For now, Bitcoin remains under pressure as investors assess geopolitical risks. The cryptocurrency’s next moves may depend on support levels and broader market sentiment.
