Bitcoin prices declined on Friday, slipping below the important $70,000 level as rising geopolitical tensions in the Middle East pushed oil prices higher and created uncertainty around global inflation and interest rates.
The largest cryptocurrency by market value dropped 5.2% to $68,779 by 09:40 ET (14:40 GMT). Earlier in the week, Bitcoin briefly climbed above $74,000. Despite Friday’s pullback, the digital asset remains on track for a weekly gain of more than 4%.
Iran Conflict and Rising Oil Prices Weigh on Crypto Markets
Investor sentiment in the cryptocurrency market remained cautious as geopolitical tensions escalated following U.S. and Israeli strikes on Iran. The attacks triggered retaliatory missile and drone responses across the region, pushing the conflict into its seventh day.
The situation has also raised concerns about disruptions in global energy supply. The Strait of Hormuz, a critical shipping route that normally handles about 20% of the world’s oil supply, is now under threat due to the ongoing conflict.
Oil prices have surged since the escalation began, rising more than 16% this week as traders fear prolonged supply disruptions if the conflict continues.
Higher crude prices have renewed concerns about global inflation, which could complicate the outlook for central bank policy. As energy costs rise, investors have started reducing expectations that the U.S. Federal Reserve will cut interest rates in the near future.
These shifting expectations have supported the U.S. dollar, which strengthened during the week. A stronger dollar typically creates pressure on risk assets such as cryptocurrencies and commodities. Gold prices have also weakened despite the geopolitical uncertainty.
Weak U.S. Jobs Data Raises Fed Rate Cut Expectations
Meanwhile, the U.S. labor market showed signs of weakness in February as nonfarm payrolls unexpectedly declined. The drop was partly attributed to severe winter weather and a labor strike at a major healthcare provider.
According to data from the U.S. Bureau of Labor Statistics, payrolls fell by 92,000 during February. Economists had expected an increase of about 50,000 jobs. The figure also came in below January’s revised gain of 126,000 jobs.
February marked the third monthly decline in payrolls over the past five months, following a revised drop of 17,000 jobs in December.
The unemployment rate also increased slightly, rising to 4.4% as job losses spread across several sectors of the economy.
Despite the weaker employment figures, other indicators suggest the U.S. economy remains relatively resilient. Recent reports showed continued growth in both the services and manufacturing sectors, while consumer spending has stayed fairly stable. However, analysts note that much of this spending appears to be driven by higher-income households.
After the jobs report was released, financial markets adjusted expectations for future Federal Reserve policy. Traders now anticipate the next interest-rate cut could arrive as early as July, with two potential reductions priced in before the end of the year, according to CME Group’s FedWatch tool.
Earlier in the day, Federal Reserve Governor Christopher Waller said weaker employment data could influence the policy outlook. Waller has been among the few policymakers openly supporting the possibility of rate cuts in the near term.
Federal Reserve officials remain cautious, however. After several previous rate reductions, many policymakers prefer to wait and assess the impact of earlier easing measures while also monitoring geopolitical risks such as tariffs and the ongoing conflict involving Iran.
Altcoins Also Decline as Crypto Market Weakens
Most major altcoins also moved lower on Friday, reflecting the cautious mood in the broader crypto market.
Ethereum, the world’s second-largest cryptocurrency, dropped nearly 5% to $1,986.89.
XRP, the third-largest cryptocurrency by market value, declined around 5% to $1.36.
Solana fell 6.6%, while Cardano and Polygon each lost approximately 5.5%.
Among meme-based cryptocurrencies, Dogecoin dropped 4.8%.
