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Bitcoin slides to $66k as oil spike rattles markets
Bitcoin traded at US$66,010 after last week’s brief rally as a surge in oil prices pressured Asian equities and pushed markets into a more risk-off mood.
The cryptocurrency dropped about 1.9% in 24 hours and is roughly 10% down from its March 5 peak near US$73,500, according to The Block.
Dominick John, an analyst at Zeus Research, said elevated geopolitical risk in the Middle East and higher oil prices added inflation concerns.
Crude oil surged past US$110 per barrel, rising about 22% on the day and roughly 72% in the past month.
Asian markets moved sharply lower with Japan’s Nikkei down about 7% and South Korea’s KOSPI down 7.9%, while Hong Kong’s Hang Seng lost 2.7%.
Bitcoin ETF flows also turned negative, with the funds seeing US$576.6 million in net outflows.
Dominick John of Zeus Research flagged US$65,000 as near-term support and US$68,000 – US$69,000 as resistance, and said upcoming US consumer price index data and will be watched for signs of inflation.
🔗 Source: The Block
🧠 Food for thought
Implications, context, and why it matters.
Bitcoin’s hedging narrative has weakened as it has become more equity-linked
- After spot bitcoin exchange-traded funds (ETFs) won approval in January 2024, Bitcoin’s correlation with the S&P 500 rose, which reduced its value as a diversifier when stocks fall 1.
- Bitcoin now trades less like a stand-alone asset and more like something that can track equities during market stress 1.
- That shift helps explain why risk-off moves can hit Asian stocks and Bitcoin at the same time, with some analysis describing Bitcoin as a high-beta, growth-linked trade rather than a defensive safe haven 2.
ETFs can amplify flow-driven swings and have spurred new hybrid exposures
- Spot bitcoin ETFs helped power the rally, yet outflows in a selloff can turn them into a source of extra downside pressure 2.
- Newer funds also bundle Bitcoin with other exposures to create different risk and return mixes 3.
- Examples include a leveraged product that targets $1 of oil futures exposure plus $1 of Bitcoin futures exposure for every $1 invested, plus offerings that pair US Treasuries (US government bonds) with Bitcoin price exposure and an options strategy designed to generate income 3.
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