 ▲ A trader at the New York Stock Exchange in the United States on the 5th (local time) |
As tensions in the Middle East intensified again and international oil prices surged, the New York stock market fell overnight, followed by a broad decline in the cryptocurrency market. Analysts are gaining ground with the view that the sharp rally in the crypto market the previous day, fueled by a temporary return of risk appetite, was merely a “dead cat bounce,” meaning a brief rebound within a broader downtrend.
As of 6:43 a.m. on March 6 (Korea time), according to global cryptocurrency tracking site CoinMarketCap, Bitcoin (BTC) fell 2.86% over the past 24 hours to $71,169.80, slipping from the $73,000 range. Ethereum (ETH), the leading altcoin, dropped 3.34% to $2,080.52, while XRP declined 2.89% to $1.40. Dogecoin (DOGE), which had surged the previous day, plunged 7.92% to $0.09398, and Solana (SOL) fell 3.56% to $89.13, with most major coins unable to escape the downward trend. The total cryptocurrency market capitalization shrank 2.18% to $2.42 trillion, and the Fear & Greed Index stood at 26, indicating “Fear.”
The primary driver behind the downturn is the rapid deterioration of the Middle East situation and renewed concerns about inflation. On the 5th (local time), the Dow Jones Industrial Average closed down 1.61% at 47,954.74, while the S&P 500 (-0.56%) and the Nasdaq Composite (-0.26%) also ended in negative territory.
The market, which had briefly stabilized the previous day following the Trump administration’s announcement of a plan to escort vessels through the Strait of Hormuz, froze again after Iran firmly denied reports of ceasefire negotiations with the United States. In an interview with U.S. media, Iranian Foreign Minister Abbas Araghchi denied any request for a ceasefire and made clear there was no intention to negotiate. As the Strait of Hormuz—through which 20% of the world’s oil supply passes—was effectively blockaded and reports emerged of tanker strikes, West Texas Intermediate (WTI) crude for April delivery surged 8.51% to $81.01 per barrel, reaching its highest level in one year and eight months. A spike in oil prices fuels inflation, dampens expectations for interest rate cuts, and rapidly cools investor sentiment toward risk assets like Bitcoin.
Within the digital asset market, the prevailing assessment is that the previous day’s rally was not a genuine trend reversal based on strong fundamentals. Julio Moreno, head analyst at on-chain data firm CryptoQuant, noted that while there were positive factors such as improved spot demand behind Bitcoin’s recent rebound, macroeconomic conditions and technical indicators still point to a bearish outlook. CryptoQuant’s Bitcoin Bull Score Index currently stands at just 10 out of 100, suggesting a significant lack of bullish momentum.
Market prospects are expected to remain challenging until the geopolitical fog clears. Moreno projected that even if Bitcoin attempts another rally, the $79,000 to $90,000 range will likely serve as a very strong resistance zone. The $79,000 level corresponds to the lower bound of the on-chain realized price for short-term traders, meaning a surge of sell orders aimed at breaking even could emerge if prices enter this range. Experts advise that with uncertainty at its peak, investors should focus on risk management rather than impulsive buying.
Disclaimer: This article is for investment reference only and the publisher is not responsible for any investment losses incurred based on it. The content should be interpreted solely for informational purposes.