Oil Price Surge Drives Bitcoin Below $64,000 Amid Fed Rate Hike Bets

Bitcoin's price fell below $64,000 on Tuesday as the market faced two significant pressures. Rising oil prices have increased inflation concerns, which in turn has suppressed risk appetite. The US spot Bitcoin ETF also turned to net outflows at the start of the week, further cooling risk appetite.

The rising oil prices are a result of stalled negotiations between the US and Iran over the peace agreement and reopening navigation in the Strait of Hormuz. This has tightened the energy market once again, driving oil prices higher. If energy prices continue to rise, they may push up production and transportation costs, adding renewed inflationary pressure.

The probability of a September rate hike by the Federal Reserve has risen to 51.3% according to the CME FedWatch tool, up from 44.1% last Friday. Against this backdrop, risk assets are under pressure, and Bitcoin's rebound is also restricted.