Bitcoin Drops 3.5% — Tech Stock Decline and Rising Oil Prices Weigh on Crypto Market

Bitcoin's price fell 3.5% on Thursday to $81,652.8, erasing much of the gains achieved during overnight trading. Earlier, the price of the world's largest cryptocurrency had climbed to nearly $85,000, partly supported by inflows of capital into spot Bitcoin exchange-traded funds (ETFs).

However, market sentiment shifted over the course of the day. Investors began reducing positions in risk assets, a trend compounded by declines in technology stocks and rising oil prices.

Tech stock decline also affected the crypto market

Selling on the global technology market intensified after the financial results of several major Wall Street tech companies failed to fully meet investor expectations. Significant declines in tech stocks were recorded during the Asian and European trading sessions.

Additional concern in the market was driven by the possibility of rising interest rates and questions about how sustainable the massive investments made in artificial intelligence will be in the long term.

Bitcoin, which often follows the direction of tech stocks, came under pressure amid deteriorating investor risk sentiment. Higher interest rates also make borrowing more expensive and may reduce interest in assets characterized by higher risk.

Rising oil prices add to market uncertainty

Investor sentiment was further affected by rising oil prices. Amid ongoing tensions in the Middle East, oil reached its highest level in the past five months this week.

Market concerns were heightened by reports of a possible renewal of military confrontation between the US and Israel in relation to Iran. An escalation of the situation in the region could increase risks to energy supplies and contribute to inflationary pressure.

If rising oil prices intensify inflation, central banks may be forced to delay interest rate cuts. Such a scenario would create additional pressure on both tech stocks and cryptocurrencies.

Bitcoin remains within a narrow trading range

Despite the sharp daily price swing, Bitcoin remains within the relatively narrow trading range it has formed over the past month. The growth pace seen in the third quarter weakened in October, adding further uncertainty for the market.

Going forward, Bitcoin's direction will largely depend on the dynamics of tech stocks, interest rate expectations, and developments in the Middle East. At the same time, inflows into spot ETFs remain one of the factors that could support the cryptocurrency's price.