Bitcoin experienced a sharp pullback due to geopolitical tensions and higher-than-expected US inflation data. The largest cryptocurrency, which traded around $74,000 for the past 24 hours, rapidly dropped to the $71,000 level today following news of further attacks on Iran and the release of February’s Producer Price Index (PPI) data exceeding expectations.
Selling pressure in the markets intensified following harsh statements by US President Donald Trump against Iran. In posts on Truth Social, Trump described Iran as the “number one state sponsor of terrorism,” signaling a potential further escalation of tensions in the region. At the same time, Iranian state television announced that a section of the South Pars natural gas field, one of the country’s largest energy projects, had been attacked. Furthermore, reports of Israel killing the Iranian intelligence minister and the US use of bunker-buster bombs against missile targets near the Strait of Hormuz significantly increased risk perception in global markets.
Geopolitical developments directly impacted energy markets. The WTI crude oil price quickly rose from $92 to $96 per barrel, reigniting inflation concerns. Immediately following this movement, the US February PPI data was released, showing a 0.7% monthly increase, significantly exceeding the expected 0.3%. Core PPI also surpassed forecasts at 0.5%, notably as this data predates the tensions with Iran. It is assessed that inflationary pressure may intensify further with rising energy prices.
These developments have also complicated expectations regarding the Fed’s interest rate reduction process. Investors are focused on the Fed’s interest rate decision, to be announced today, and especially the messages that will emerge from the “dot plot” projections. However, rising oil prices and strong inflation data continue to put pressure on risky assets.
The cryptocurrency market experienced widespread sell-offs. Bitcoin fell approximately 3.5% in the last 24 hours, dropping to the $71,000 level, while Ethereum declined by over 6% to $2,175. Losses in Solana and XRP were around 5%. In contrast, losses in US stock markets were more limited; the Nasdaq and S&P 500 indices fell by approximately 0.4%. Gold also felt the effects of the sell-off, falling 2.5% to $4,885 per ounce.
Liquidations in derivatives markets have also reached remarkable levels. Over 95% of the total liquidation exceeding $631 million in the last 24 hours consisted of long positions. In the last four hours alone, $133 million worth of long positions were liquidated, while short liquidations remained quite limited.
