Silent Bitcoin Price action in the $74,000 area was broken Wednesday morning by reports of a military escalation in Iran and then by February inflation data that came in much stronger than expected.
This decline began when US President Donald Trump adopted a more aggressive tone towards Iran, suggesting further escalation in a series of Truth Social publications and calling the country the “FIRST SPONSOR STATE OF TERROR.”
Meanwhile, Iranian state television reported that part of the South Pars gas field had been attacked.
It followed reports that Israel killed Iran’s intelligence minister, Esmail Khatib, while the United States deployed 5,000-pound bunker busting bombs targeting missile sites near the Strait of Hormuz, a key route for global oil flows.
This news combined to send the price of WTI crude oil from as low as $92 per barrel overnight to nearly $96.
Minutes later, the US producer price index for February rose 0.7% versus just 0.3% expected and up from 0.5% in January. Core PPI rose 0.5% versus 0.3% expected, although down from 0.8% in January. It is important to note that the worrying inflation data predates the attacks on Iran and the sharp rise in oil prices that followed.
The data complicates prospects for rate cuts, particularly with oil prices still high, and weighs on risk assets ahead of the U.S. stock market opening.
Bitcoin has now fallen to near $71,000, down 3.5% over the past 24 hours. The declines for ether (ETH), solana (SOL), and XRP (XRP) are closer to 5%. US stock indices posted only modest losses, with the Nasdaq and S&P 500 down 0.4%.
Precious metals are also being hit by the sell-off, with gold quickly sliding 2.5% to $4,885 an ounce.
The Fed arrives later
Later in the day, the U.S. Federal Reserve is largely expected to hold rates steady, focusing on Chairman Jerome Powell’s message and how policymakers interpret the recent mix of growth risks and inflationary pressures. Trump once again renewed his calls for rate cuts in an article published Wednesday, adding a political dimension to the meeting.
UPDATE (March 18, 3:13 p.m. UTC): Updates prices with Bitcoin still falling towards $71,000.
