Silent bitcoin Price action in the $74,000 area was crushed Wednesday morning on reports of military escalation in Iran and then February inflation data that came in far stronger than expected.
The declines started as US President Donald Trump struck a more aggressive tone towards Iran, hinting at further escalation in a series of Truth Social posts, calling the country “NO STATE SPONSOR OF TERROR.”
Meanwhile, Iran’s state television reported that part of the country’s South Pars gas field was attacked.
This followed reports that Israel killed Iran’s intelligence minister, Esmail Khatib, while the US deployed 5,000-pound bunker-buster bombs targeting missile sites near the Strait of Hormuz, a key route for global oil flows.
These news together sent the price of WTI crude from as low as $92 a barrel. barrel overnight to nearly $96.
A few minutes later, the US producer price index for February rose 0.7% against just 0.3% expected and up from January’s 0.5%. Core PPI rose 0.5% against an expected 0.3%, but down from January’s 0.8%. It is important that the disturbing inflation data is from before the attacks against Iran and the subsequent sharp increase in the price of oil.
The data complicates the outlook for rate cuts, especially with oil prices still high, weighing on risk assets ahead of the US stock market open.
Bitcoin has now fallen to close to $71,000, down 3.5% over the past 24 hours. The decline for ether (ETH), solana (SOL) and XRP (XRP) is closer to 5%. American stock indices show only modest losses, the Nasdaq and the S&P 500 fall by 0.4 per cent.
Precious metals are also getting caught up in the sell-off, with gold quickly sliding 2.5% to $4,885 per ounce. ounces.
Fat comes later
Later in the day, the US Federal Reserve is widely expected to keep interest rates steady, shifting focus to Chairman Jerome Powell’s messages and how policymakers interpret the latest mix of growth risks and inflationary pressures. Trump renewed calls for rate cuts in a Wednesday speech, adding a political dimension to the meeting.
UPDATE (March 18, 15:13 UTC): Updating prices with bitcoin falling further towards $71,000.
