Oil Price Rally Weighs Heavily on Bitcoin's Plunge

Bitcoin's price has been pulled lower by negative macro developments this week. The conflict in Iran had initially led to expectations of a de-escalation and an earlier end, which in turn supported the crypto market with falling oil prices. However, President Trump poured cold water on these expectations at the UN General Assembly, stating that the US would make a deal with Iran after the November elections.

The general risk sentiment started to deteriorate as oil prices began rising again and dragged cryptocurrencies lower. The bearish momentum increased further yesterday after the release of the US Flash PMIs, which showed stronger growth than expected, triggering another hawkish repricing that sent Treasury yields to new highs.

The focus remains on interest rates expectations and Middle East developments. If markets sense an earlier end or a surprising breakthrough, oil prices may decline and support Bitcoin. Conversely, if things remain unchanged or even re-escalate, crude oil is likely to remain supported into new highs, weighing on the crypto market.