Bitcoin 'Tripped Up' by Inflation...Re-enters the $70,000 Era

▲ Bitcoin (BTC)/ChatGPT generated image

Bitcoin (BTC) has turned to a downward trend, giving up the $77,000 mark as it faces inflation fears triggered by a surge in international oil prices.

According to a report by crypto media outlet NewsBTC on April 29 (local time), Bitcoin fell below the psychological support level of $77,000 immediately after news broke that Brent crude prices had surpassed $110 per barrel. This resulted from a sharp cooling of investor sentiment towards risk assets as geopolitical tensions in the Middle East escalated into a threat to block the Strait of Hormuz, causing energy prices to surge.

Rising oil prices are stimulating global inflation, acting as a decisive factor in dampening expectations for a U.S. Federal Reserve interest rate cut. The market is accelerating asset sales, concerned about the possibility of hawkish remarks coming from the Federal Reserve's interest rate decision scheduled for this week. As Bitcoin price falls below $77,000, warnings are successively emerging that it could further decline to the $75,000 and $72,000 levels in the short term.

Major altcoins such as Ethereum (ETH) and XRP also turned red in sync with Bitcoin's downturn. Ethereum, in particular, is experiencing weakness as selling pressure intensifies after failing to break the $2,400 resistance level. As billions of dollars in market capitalization evaporated from the overall cryptocurrency market within hours, the fear index among investors is sharply rising.

Cryptocurrency experts analyzed that the current downturn is not just a simple technical correction but could be a full-scale capital outflow due to macroeconomic uncertainties. If surging oil prices hit the real economy across the board, the liquidity shortage in the cryptocurrency market will inevitably deepen further. Large institutional investors are also reducing their exposure to risk assets in their portfolios, wary of additional geopolitical risks.

The cryptocurrency market, including Bitcoin, is expected to continue with maximized volatility for the time being, depending on oil price trends and the Federal Reserve's stance. Investors are carefully monitoring the market's direction, watching whether the $75,000 support level holds. As long as the negative factors originating from the Middle East are not resolved, downward pressure on the market is expected to continue.

*Disclaimer: This article is for investment reference purposes, and we are not responsible for investment losses based on it. This content should be interpreted for informational purposes only.*