A mix of geopolitical escalation, inflation data, and Federal Reserve signals has rattled global markets.
According to analyst Ash Crypto, the combined pressure from rising oil prices, hotter-than-expected producer price inflation, and a cautious Fed stance is also weighing on crypto alongside traditional risk assets.
What Happened
In a March 19 post on X, Ash Crypto noted that market stress had intensified, with three events that happened almost simultaneously to blame. First, reports of an attack on Iran’s South Pars gas complex, the largest gas field in the world, immediately pushed oil prices higher, with Brent crude jumping as much as 7% in one day and the West Texas Intermediate going up 4.2%.
At the same time, the U.S. producer price index data came in higher than expected at 3.4% year-on-year, stoking concerns that inflation may be rising again.
The Federal Reserve also added to the cautious mood, keeping interest rates steady at 3.50% to 3.75% as expected, but topping it off with a warning from Chair Jerome Powell that rising energy costs could make it harder to predict inflation.
“Powell held rates and acknowledged the Middle East situation for the first time in Fed history. Markets disliked his tone,” the analyst wrote.
Elsewhere, Binance Research reported that the Fed had also discussed raising interest rates, even though it expects only limited easing later in the year.
Even before the FOMC decision, Bitcoin shed more than $5,000 at one point, although it recovered a bit after the news. At the time of writing, CoinGecko data showed BTC down almost 5% in the last 24 hours, with ETH suffering a similar fate, losing more than 6%.
Despite the pullback, there is still underlying demand, with XWIN Research reporting that U.S. spot Bitcoin ETFs saw net inflows on March 18, even as prices were falling. On-chain data also shows accumulation, including a large buyer adding $191 million worth of BTC since March 10. However, the influx is offset by whales moving more than 44,000 BTC to exchanges, which, according to XWIN, could translate into selling pressure in the short term.
Short-Term Caution
According to Ash Crypto, BTC is currently holding above a key support area near $66,000 after failing to break resistance at $76,000 earlier in the week. Regarding ETH, the analyst said the asset is testing a critical zone between $2,180 and $2,200, which could cause a drop to $1,900 if there’s a sustained move below the range.
Bitcoin has stayed pretty stable over the week, with a small gain of 2%. On the other hand, Ethereum added more than 8% over the same period, implying that the recent drop could be more of a quick reaction than a reversal in the broader trend. Still, both assets are far below their all-time highs. BTC is down almost 44% from its peak, and Ethereum is nearly 56% from its own, even though its performance in the last year has turned green, registering a nearly 13% uptick, while BTC is down almost 15%.
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