Bitcoin regained some momentum on Tuesday after falling below $69,000 as investor risk sentiment softened ahead of U.S. President Donald Trump’s deadline for Iran to reopen the Strait of Hormuz or potentially face military action.
As of 9:22 GMT, the world’s biggest cryptocurrency was up 0.37 percent at $69,113 after falling to as low as $68,525.1 earlier in the session.
Bitcoin had briefly climbed above $70,000 on Monday amid hopes for a possible ceasefire, but was unable to maintain those gains.
Investors flee to traditional safe-haven assets
Market sentiment worsened after Iran rejected a U.S.-backed ceasefire proposal and instead called for wider conditions, increasing the risk of further escalation.
Trump has warned that Iran could be “taken out” if it does not comply by his 8 p.m. ET deadline, including threats to strike major infrastructure targets such as power plants and bridges.
Escalating tensions between the two sides have rattled global markets, sending oil prices above $110 a barrel as disruptions in the Strait of Hormuz threaten a vital route for global crude shipments.
The jump in energy prices has further added to inflation worries and encouraged investors to move into traditional safe-haven assets like the U.S. dollar.
Read: Bitcoin set for over 3 percent weekly decline as futures, ETF markets pause
Fed rate trajectory to challenge Bitcoin
Bitcoin has increasingly tracked broader market risk sentiment, with geopolitical tensions outweighing earlier optimism over diplomatic progress.
Attention is now shifting to U.S. economic data, especially the March consumer price index report due later on Friday. Higher energy prices tied to the Middle East conflict are expected to add upward pressure on inflation, potentially strengthening expectations that interest rates will stay higher for longer.
That backdrop could create another challenge for Bitcoin, which typically comes under pressure when interest rates stay elevated.
The broader crypto market moved lower on Tuesday, extending its losses as caution dominated market sentiment.
Ethereum, the world’s second-largest cryptocurrency, fell 1.21 percent to $2,124.89.
XRP, the third-largest crypto token, dropped 2.36 percent to $1.3206. Solana declined 2.61 percent to $80.310, while Cardano lost nearly 5 percent.
Among meme tokens, Dogecoin was down 1.89 percent.
