Bitcoin Tumbles Near $81,000 as Surging Oil Prices Fuel Inflation Fears

Bitcoin Tumbles — Bitcoin’s price fell sharply on Thursday, dropping nearly 4% to around $81,300, as a surge in oil prices above $110 revived investor concerns about inflation and potential central bank rate hikes.

The cryptocurrency retreated from gains made earlier in the week when it was approaching $85,000, following a rise in tech stocks. The reversal came as escalating conflict in the Middle East, including attacks by Yemen’s Houthis on Saudi Arabia, spurred fears of oil supply disruptions, pushing crude prices higher.

Analysts note that higher oil prices can pressure “risk-on” assets like Bitcoin in the short term because they increase the likelihood of the Federal Reserve raising interest rates to combat inflation. Bitcoin has historically performed well in low-rate environments due to increased market liquidity and has often moved in correlation with tech stocks.

Despite the recent dip, Bitcoin is coming off its best quarter in years, with analysts suggesting the asset has entered a bull market after rising above its key 365-day moving average.