Bitcoin Price Drops as Oil Prices Surge Amid Israel-Iran Tensions

Bitcoin’s price has dropped to its 50-day simple moving average amid rising oil prices, which surged over 6% following tensions in the Middle East. The seven-day options skew shows a significant tilt towards puts as traders seek downside protection. This demand pushed both the 30-day and 60-day skews into negative territory. Oil price increases could also influence inflation expectations and impact markets, including cryptocurrencies.

Bitcoin (BTC) has seen a drop in its price, landing at its 50-day simple moving average, coinciding with surging oil prices due to rising geopolitical tensions in the Middle East. There’s been a significant slide in Bitcoin’s short-term options skew as market traders are increasingly looking for downside protection amid these tensions. The skew for Bitcoin options over the past week has fallen to its lowest position since April, indicating a shift towards a higher demand for put options relative to calls.

Data from Amberdata shows that this seven-day skew now sits at -3.84%. This represents the lowest point since April 16, meaning that put options, which protect against price declines, are now more costly than call options for the first time in three months. Traders typically purchase put options when they want to hedge their long positions, or if they anticipate a drop in prices. This growing demand has driven both the 30-day and 60-day skews into negative territory.

As of now, Bitcoin’s price is recorded at approximately $103,150, marking a significant loss of 4.59% over the last 24 hours, based on CoinDesk’s findings. Earlier this week, Bitcoin did briefly exceed the $110,000 mark, stirring hopes among bulls that the 50-day SMA could act as a level of support. If this average fails to hold, it could lead to further selling pressure, reminiscent of a similar situation in February this year when support levels fell.

On another note, oil prices have spiked, with West Texas Intermediate (WTI) crude soaring more than 6% to reach $74.30 a barrel. This is the highest price seen since February 3, extending a weekly gain of around 13%. The spike follows airstrikes by Israel on Iran, which have reportedly triggered retaliatory missile actions from Tehran. Such sudden surges in oil prices often provoke inflationary effects across global economies.

This latest oil price jump could complicate matters for the US economy, especially as President Trump’s ongoing trade war poses additional risks, particularly for net-importer countries. Investors are now wary that these developments might tarnish expectations of future Federal Reserve rate cuts, leading to increased volatility not only in stocks but also in cryptocurrencies. At the time of this report, futures associated with the S&P 500 are trading 1.5% lower.

Reporter Omkar Godbole, based in Mumbai, is the Co-Managing Editor for the Markets team at CoinDesk. With a master’s degree in Finance and membership with the Chartered Market Technician (CMT), Omkar brings extensive experience in the field, previously covering currency markets and commodities for FXStreet and other brokerage firms. He holds small stakes in Bitcoin, Ether, BitTorrent, Tron, and DOT.