Following the escalation, Bitcoin lost around $1,200, falling from Sunday evening’s interim high near $63,800 to around $62,600. Ethereum showed a similar pattern: the second-largest cryptocurrency dropped by about 3.7% over the same period. Across the altcoin sector, losses mostly ranged between 2% and 3%.
The renewed attacks also had an immediate impact on the crypto derivatives market. Since Sunday morning, short sellers had initially been hit hard, but over the past few hours the trend has shifted in favor of the bears, according to Coinglass data.
U.S. macroeconomic data is adding further pressure on Bitcoin. Following the renewed military escalation, oil prices moved higher, with both WTI and Brent rising by around 2.6% to roughly $96 per barrel. Higher oil prices can indirectly weigh on Bitcoin by increasing inflation risks and strengthening expectations of interest rate hikes.
The U.S. Federal Reserve recently received more arguments for maintaining a restrictive policy stance after the Bureau of Labor Statistics published new labor market data. Nonfarm payrolls rose by 172,000 in May, while the unemployment rate remained unchanged at 4.3%. This points to a resilient labor market, which is generally unfavorable for Bitcoin because it reduces the likelihood of easier monetary policy.
Inflation in the United States also remains elevated. In April, the inflation rate stood at 3.8%, and the BLS will publish May data on Wednesday. Forecasts point to a rise to 4.2%.
If a robust labor market coincides with rising inflation, the Fed may move toward rate hikes in the medium term. For Bitcoin, this would mean a risk of tighter liquidity — exactly what the crypto market does not need during an attempted recovery.
Conclusion:
Bitcoin remains vulnerable due to the combination of geopolitical tension, rising oil prices, and strong U.S. labor market data. If inflation accelerates and the Fed gains more reasons to raise rates, the crypto market may face another liquidity squeeze.
