Bitcoin weakened as markets ramped up bets on further Fed rate hikes while a bond market sell-off pushed yields higher, amplifying macro-driven volatility. Soaring oil and geopolitical tensions are lifting inflation fears and eroding traditional safe-haven demand.
Bitcoin is trading near $73,979.85 as markets pause for Fed Chair Jerome Powell’s comments on oil and inflation ahead of today’s rate decision; traders are watching for signals that policy support for risk assets may ebb.
Bitcoin fell more than 3.5% to under $67,000 on Tuesday as rising tensions in the Middle East triggered an oil shock and sent investors toward the U.S. dollar. The move reflected a broader risk-off shift that hit crypto alongside equities.
Rising U.S.–Iran tensions and the prospect of a Strait of Hormuz closure could trigger a sharp oil shock, stoking inflation and forcing central banks to delay rate cuts, which would weigh on risk assets including cryptocurrencies.
U.S. PCE inflation came in at 2.9% year-over-year, hotter than expected. Bitcoin fell sharply after the release as markets reassessed the Fed's rate outlook.
Bitcoin continued to fall as a broader deleveraging hit crypto markets, prompting traders to reassess its role as a near-term inflation hedge. Forced liquidations and risk-off flows amplified the move.
A Bank of Japan summary of views from its January meeting showed policymakers flagged rising inflationary pressure from the weak yen and warned some risk of falling "behind the curve." The comments raise the prospect of an earlier policy reassessment that could affect global markets.
December's Producer Price Index jumped 3%—well above forecasts—and Bitcoin fell as markets reassessed the timing of rate cuts. Persistent inflation is weighing on risk assets.
U.S. PCE inflation matched expectations at 2.8% year-over-year on Jan. 22, 2026, indicating inflation remains elevated. Bitcoin (BTC) reacted negatively to the release and was trading lower on the day.