Oil Price Surge Sparks Bearish Signal for Bitcoin

Oil prices have surged more than 10% in two days due to escalating tensions at the Strait of Hormuz, following the US-Iran missile exchange. Meanwhile, Bitcoin has dropped nearly 6% during this time.

CryptoQuant analyst Darkfost notes that Brent crude oil and Bitcoin have an inverse long-term relationship. Whenever Brent crude trades above its 365-day average, it often signals growing economic stress.

Higher oil prices typically mean rising inflation, slower economic growth, and tighter financial conditions, which can reduce demand for assets like Bitcoin. Darkfost says this relationship is not new, comparing Bitcoin to Brent crude over the past decade.

He found that Bitcoin has often struggled whenever oil entered a strong uptrend. 'When the Brent price starts rising again, it means the music is starting to stop,' implying a slowdown in Bitcoin's bullish trend.