Bitcoin slipped on Friday and dropped below the important $70,000 level. The decline came as global markets reacted to rising tensions in the Middle East and a sharp jump in oil prices.
The world’s largest cryptocurrency was trading near $68,779 during the session. That marked a fall of about 5.2% on the day. Earlier this week Bitcoin briefly crossed $74,000 before losing momentum.
Despite the latest drop, Bitcoin is still heading toward a weekly gain of more than 4%. The market remains volatile as investors react to global economic and geopolitical developments.
Middle East conflict and oil prices pressure Bitcoin
The crypto market has become cautious as the conflict involving Iran continues to escalate. The fighting has entered its seventh day with missile and drone attacks reported across the region.
The situation has also raised fears about disruptions in the Strait of Hormuz. This narrow shipping route handles around 20% of the world’s oil supply.
Any threat to this route can shake global energy markets. Oil prices have already jumped more than 16% this week because of these concerns.
Rising oil prices can push inflation higher around the world. That is worrying investors who were expecting interest rate cuts soon.
If inflation stays high, central banks may keep interest rates elevated for longer. Higher rates usually put pressure on risk assets like cryptocurrencies.
The stronger U.S. dollar has also weighed on markets this week. A rising dollar often makes assets like Bitcoin less attractive to global investors.
US jobs data shifts expectations for Federal Reserve rate cuts
The U.S. labor market also surprised investors on Friday. New data showed nonfarm payrolls fell by 92,000 in February.
Economists had expected about 50,000 new jobs to be added during the month. The drop was partly linked to severe winter weather and a strike at a major healthcare provider.
January job growth was also revised to about 126,000. Over the past 5 months the labor market has now recorded 3 declines in payroll numbers.
The unemployment rate moved higher as well. It rose to about 4.4%.
Despite the weaker jobs report, the broader U.S. economy still shows some resilience. Both manufacturing and service sectors continue to expand. Consumer spending also remains relatively steady, although much of it is coming from higher income households.
After the report, traders adjusted expectations for the Federal Reserve. Markets now believe the first rate cut could arrive as early as July. There is also a growing chance that the central bank could reduce rates twice before the end of the year.
Some policymakers have already hinted at this possibility. Federal Reserve Governor Christopher Waller recently said weak employment data could influence the policy outlook.
Still many officials remain cautious. They want more data before deciding on further interest rate changes. Geopolitical risks and global trade tensions are also being closely watched.
Altcoins fall as crypto market turns cautious
The weakness was not limited to Bitcoin. Most major cryptocurrencies also declined during Friday’s session.
Ethereum dropped nearly 5% and traded around $1,986. XRP also slipped about 5% and moved near $1.36.
Solana recorded one of the sharper declines and fell around 6.6%. Cardano and Polygon both lost roughly 5.5%.
Meme coin Dogecoin also moved lower and dropped about 4.8%.
The overall crypto market remains sensitive to global economic events. Investors are closely watching developments in the Middle East, movements in oil prices, and signals from the U.S. Federal Reserve. These factors could continue driving volatility in the coming weeks.