Bitcoin Slides 2.2% as Oil Jumps on Ukraine Strikes and Iran Tanker Attack

Bitcoin Retreats After Oil Prices Spike

Bitcoin lost ground on Monday, dropping 2.2% from a high of $84,254 on the Bitstamp exchange. The pullback came as oil prices surged following renewed strikes on energy infrastructure in the Russia-Ukraine conflict and an attack on an oil tanker in the Strait of Hormuz.

Brent crude oil reached $107.25 per barrel, its highest level since September 16, while WTI crude spiked past $94 per barrel. The rise in oil prices added pressure to crypto markets already nervous ahead of upcoming US inflation data.

Key Points

• Bitcoin reached $84,254 before falling 2.2% on Monday, October 12.
• Brent crude oil hit $107.25 per barrel, the highest since September 16.
• US Consumer Price Index (CPI) data is due Wednesday, with Producer Price Index (PPI) data following Thursday.
• Options market data showed traders positioned defensively but still left room for an upside breakout above $90,000.

Geopolitical Triggers Behind the Oil Surge

Ukraine's president Volodymyr Zelenskyy accused Russia of continuing to target energy infrastructure, despite US president Donald Trump announcing a moratorium on such strikes. Separately, Iran reported that an oil tanker had been hit and was ablaze in the Strait of Hormuz, a critical waterway for global oil shipments.

Robin Brooks, former chief FX strategist at Goldman Sachs, argued that oil markets had priced in too much risk premium. In a blog post published the same day, he noted that oil volumes leaving the Persian Gulf were around 13 million barrels per day, down from a high of 16.5 million barrels per day a few weeks earlier, but still significantly better than levels seen during the height of the war in March and April.

What Options Traders Are Watching

Trading company QCP Capital observed that Bitcoin options markets showed a mix of defensive positioning and optimism. The firm reported that implied volatility held firm even as the spot price settled back into its range, and risk reversals showed a less pronounced premium for puts than usual.

QCP Capital's analysis suggested the market was not as heavily defensive as usual, though still positioned for a possible breakout. The firm noted that a clean move above $87,000 would bring $94,000 into focus.

Analyst Rekt Capital flagged $83,400 as local resistance on the day. Data from CoinGlass showed ask liquidity clustered around $84,500 on exchanges, with roughly $180 million in total liquidity at that level. Bid support was building around $82,000, which the spot price was trending toward.

What Happens Next

Markets will be closely watching the Consumer Price Index data due Wednesday and Producer Price Index data due Thursday. According to Cointelegraph's earlier reporting, CPI has proven particularly sensitive to rising oil prices, which adds another layer of uncertainty for crypto markets this week.

Sources

• Cointelegraph