Bitcoin Slides to Key Support as Oil Spikes on Israel-Iran Conflict, Traders Rush for Downside Protection

Bitcoin’s price retreated to a critical technical level Thursday as escalating geopolitical tensions in the Middle East drove a sharp rally in oil prices and stirred risk-off sentiment across markets.

The cryptocurrency fell to its 50-day simple moving average (SMA) near $103,150, marking a 4.59% drop over the past 24 hours, according to CoinDesk data. This level is seen by many traders as a key support zone. A breakdown below it—similar to what occurred in February—could trigger further selling pressure.

The slide comes as demand for downside protection in bitcoin’s options market surged. The seven-day skew on Deribit, which reflects the cost of puts relative to calls, fell to -3.84%, its lowest reading since April 16, per data from Amberdata. The 30- and 60-day skews also turned negative, suggesting a broader pivot toward bearish positioning.

“Traders are loading up on puts either to hedge long exposure or to speculate on further declines,” noted a derivatives analyst tracking BTC sentiment.

Oil Jumps on Middle East Escalation

Meanwhile, WTI crude surged more than 6% to $74.30 per barrel, its highest level since early February, extending weekly gains to 13%, per TradingView data. The spike followed Israeli airstrikes on Iranian military and nuclear infrastructure—reportedly met with missile responses from Tehran—stoking fears of wider regional instability.

Inflation Risks Resurface

Sharp increases in oil prices can have inflationary ripple effects across the globe, particularly in energy-importing economies. The latest surge comes as President Donald Trump’s renewed trade war rhetoric raises further concerns about supply chain disruptions and inflation spikes.

Market watchers warn that these developments could complicate expectations for interest rate cuts by the Federal Reserve.

“Rising energy prices combined with trade-driven inflation could force the Fed to remain hawkish for longer, which would weigh on equities and risk assets like crypto,” said one macro strategist.

At last check, S&P 500 futures were down 1.5%, reflecting broader investor caution heading into the weekend.

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