Bitcoin Drops Below $84,000 as Middle East Tensions Rise

Bitcoin dropped about 1.5% to just above $84,200 early Wednesday as geopolitical tensions in the Middle East escalated. Iranian attacks on tankers in the Strait of Hormuz drove oil prices higher, lifting Treasury yields and the U.S. dollar. The broader cryptocurrency market also saw declines, with Dogecoin leading losses among major cryptocurrencies with a 5% drop.

Ether fell 3.5%, while XRP declined nearly 3%. Other major cryptocurrencies like BNB, SOL, ZEC, and TRX also slipped between 1% and 2.5%. The drop came after Bitcoin traded near $86,600 on Tuesday before a sharp decline early Wednesday that took it as low as about $83,840. FxPro had warned that a break below $84,000 would signal "a victory for the bears."

Traders are now awaiting the release of minutes from the Federal Reserve’s September meeting, where rates were raised by a quarter point. Dan Khus, chief analyst at LVRG Research, noted that weaker jobs data made another rate increase this month less likely after September's hike. Investors are now focused on whether the Fed's notes sound patient or hint at further rate hikes before the end of the year.

Oil prices set the tone in Asia, with Brent crude rising almost 1% to about $101.50 a barrel. The dollar strengthened against all other Group-of-10 currencies, and the 10-year Treasury yield climbed three basis points to 5.31%. Asian stocks fell despite record closes for the S&P 500 and Nasdaq 100 on Wall Street, with MSCI's Asia Pacific gauge dropping 0.6%. Bitcoin now sits about $1,200 above the $83,000 low that FxPro said would confirm sellers are in control, with a break of that level potentially opening a path to $80,000.