One of the main reasons Bitcoin is falling is oil. Escalation in the Middle East and shipping risks through the Strait of Hormuz have kept energy prices high, especially after two oil tankers were blown up today and several oil tankers were attacked over the past week. This has brought inflation fears back to the forefront and prompted markets to reprice their expectations for U.S. interest rates.
At the same time, there is pressure from declining inflows into spot Bitcoin funds, along with major liquidations of leveraged positions, mostly long positions. With risk appetite waning in stocks and global markets, the pressure on Bitcoin has intensified.
Thatโs why I believe the current decline is not just a normal correction, but the result of macroeconomic factors, geopolitics, and liquidity pressures converging at the same time. Bitcoin is directly affected by these factors, so for now Iโd rather watch the market and wait for greater clarity before taking on more risk.
We shouldn't rush to add to our positions or buy back until geopolitical conditions calm down, oil prices resume falling, inflation declines, and interest rates are repriced.
