Bitcoin Loses $83K Support As Oil Prices Surge

Bitcoin fell around 81200 dollars on October 8, after a low near 80940 dollars, its lowest level in nearly three weeks. The rise in oil and US rates increases the pressure, while tensions around Iran revive inflation fears.

Bitcoin price approaches 80000 dollars

Bitcoin lost about 2.7% during the session, after trading up to 83560 dollars in the last 24 hours. It has now erased its early October gains and dropped more than 6% from its peak near 86600 dollars reached on Tuesday.

The decline affects the entire crypto market. Ether fell more than 5% to around 2430 dollars, while XRP lost nearly 6% around 1.35 dollars. Leveraged positions amplified the movement.

Several data summarize the session :

• Bitcoin trades around 81200 dollars after briefly approaching 80940 dollars ;
• The 83000 dollars level, considered an important support, was broken ;
• About 550 million dollars of leveraged crypto positions were liquidated during the initial phase of the decline ;
• Brent exceeds 104 dollars per barrel, up more than 4% ;
• The US ten-year yield trades around 5.3%, near its highest since 2002.

FxPro estimated that breaking 83000 dollars could quickly open a path towards 80000 dollars. This scenario has largely materialized, but a temporary breach of a level does not yet confirm a new lasting bearish phase.

Oil amplifies inflation concerns

Brent climbed to around 104.75 dollars per barrel, while US WTI oil exceeded 92 dollars. Both benchmarks reached their highest level in over a week.

This increase is based on several factors according to on-chain analysis. Attacks on ships in the Persian Gulf and near the Strait of Hormuz have heightened supply concerns. Only seven ships carrying raw materials passed through the strait on October 6, their lowest number since July 23.

Oil flows via this route have decreased by 27%, to about 10.1 million barrels per day. The strait remains strategic since about one-fifth of the world’s oil and liquefied natural gas usually transit there.

Press reports indicate that the White House has asked the Pentagon to prepare strike options against Iranian targets. This potential request does not mean an intervention has been decided. Nevertheless, it is enough to increase the risk premium embedded in oil prices.

The approach of Hurricane Isaias also led several producers, including Shell and Chevron, to suspend some of their activities in the Gulf of Mexico. More than 25% of oil production in this area is believed to have been temporarily halted.

High rates weigh on Bitcoin price

Rising oil prices fuel inflation expectations. Investors fear that persistently high energy prices will prevent the Federal Reserve from easing its monetary policy, or even force it to raise rates further.

The yield on US ten-year bonds has risen near 5.3%. High rates make bond investments more attractive and increase financing costs. They generally reduce appetite for risky assets, including cryptos.

Equity markets are under the same pressure. The S&P 500 and Nasdaq retreated after recent records, with technology stocks particularly suffering. Bitcoin’s decline is therefore not caused solely by a factor specific to the crypto market.

Demand was already fragile before these new tensions. Since September 22, open interest on bitcoin futures has decreased by about 10%, falling from 28.8 to 26 billion dollars. This contraction signals less willingness among traders to increase their exposure.

80000 dollars become the next test

The 80000 dollars level now constitutes the main psychological support. A quick reaction by buyers could bring bitcoin back to 82800 dollars, then 83000 dollars. A sustained recovery above this zone would ease immediate pressure.

Conversely, several closes below 80000 dollars would increase the risk of a return towards 77000 dollars, another technical zone watched since the bullish breakout in September. This is a market scenario, not a certain prediction.

Oil’s evolution will remain decisive. A drop of Brent below 100 dollars would reduce some of the pressure on rates and risky assets. New maritime attacks or a US military decision could instead prolong volatility.

Flows of bitcoin ETFs, bond yields, and upcoming Federal Reserve statements will help measure the support’s strength. The Iranian conflict accelerated the correction, but weak demand and liquidations had already set the stage.