Global risk assets came under pressure on Monday following a renewed escalation of the conflict between Iran and Israel. Oil prices rose more than 3%, Asian stocks declined significantly, Bitcoin fell back to around $62,900, erasing some of its weekend gains, and major tokens such as ETH and XRP also weakened.
Geopolitical conflicts fuel risk aversion
Reports indicate that investor risk appetite cooled significantly after the latest round of military strikes disrupted the market. Apart from a rapid rise in crude oil prices, major Asian stock indices generally declined, reflecting growing market concerns about the spillover effects of the Middle East situation.
US President Trump called on Israel not to retaliate against Iran, but this statement has not yet reversed market sentiment. Funds continue to shun highly volatile assets, putting continued pressure on the crypto market.
Bitcoin falls back below key range
Bitcoin briefly dipped below $63,000 before recovering to around $62,900. CoinDesk noted that this move essentially erased the gains from the weekend rally.
- Bitcoin recently fell to around $62,900.
- International oil prices rose by more than 3% in a single day.
- Bitcoin has fallen by approximately 14% recently.
Besides geopolitical tensions, recent outflows from Bitcoin ETFs and rising US Treasury yields have also continued to weigh on market performance. These combined factors have resulted in a cumulative decline of approximately 14% for Bitcoin in recent times.
Volatility may continue to remain at high levels.
The report suggests that market volatility is likely to remain high in the short term. Besides the evolving situation in the Middle East, investors are also awaiting US inflation data and the impact of several large IPOs on liquidity.
Until risk appetite recovers, crypto assets and other high-beta assets are likely to continue to be influenced by macroeconomic news. For the market, oil prices, bond yields, and ETF fund flows remain several variables to watch.
