Bitcoin and Ethereum Markets Shaken by Iran Tensions, Hot Inflation Data, and Fed Warning

Analysts are eyeing $2,180–$2,200 for Ethereum nearby, as a further break below could open the door to $1,900.

A mix of geopolitical tensions, inflation data, and signals from the Federal Reserve have shaken global markets.

According to analyst Ash Crypto, the combined pressure from rising oil prices, higher-than-expected producer inflation, and the Fed’s cautious stance are also weighing on crypto alongside traditional risk assets.

What’s going on

In an article on March 19 in X, Ash Crypto noted that the stress of the market has intensified, with three events that happened almost at the same time to blame. First, reports of an attack on Iran’s southern gas complex, the world’s largest natural gas hub, immediately sent oil prices soaring, with Brent crude jumping nearly 7% in one day and West Texas Intermediate up 4.2%.

At the same time, US producer price index data came in higher than expected at 3.4% year-on-year, raising concerns that inflation may rise again.

The Federal Reserve also added to the cautious stance, keeping interest rates steady at 3.50% to 3.75% as expected, but ending with a warning from Chairman Jerome Powell that rising energy costs could make it difficult to predict inflation.

“Powell held the standards and acknowledged the situation in the Middle East for the first time in the history of the Fed. The markets did not like his tone,” the analyst wrote.

Elsewhere, Binance Research reported that the Fed has also discussed raising interest rates, although it expects a moderate cut later in the year.

Even before the FOMC decision, Bitcoin lost more than $5,000 at one time, although it recovered slightly after the news. At the time of writing, CoinGecko data showed BTC down nearly 5% in the last 24 hours, with ETH facing the same fate, losing over 6%.

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Despite the pull back, it’s still there basic demand, with XWIN research reporting that the US saw Bitcoin ETFs see net inflows on March 18, as prices fell.. On-chain data also shows accumulation, including a large buyer adding 191 million BTC since March 10. However, the influx is driven by whales moving more than 44,000 BTC in the exchange, which, according to XWIN, can translate into selling pressure in the short term.

Short Term Warning

According to Ash Crypto, BTC is currently holding above the key support area near $66,000 after failing to break the $76,000 resistance earlier in the week. As for ETH, the analyst said the asset is testing a critical zone between $2,180 and $2,200, which could trigger a drop to $1,900 if there is a sustained move below the range.

Bitcoin remained stable throughout the week, with a small gain of 2%. On the other hand, Ethereum has added more than 8% in the same period, which means that the recent decline may be a quick reaction rather than a reversal of the broader trend. However, both assets are well below their all-time highs. BTC is down about 44% from its peak, and Ethereum is about 56% from its, although its performance in the last year has turned green, registering about 13% uptick, while BTC is down about 15%.