Oil and bitcoin move in opposite directions as Strait of Hormuz crisis sends crude to $110

As the Middle East conflict intensifies, the link between oil and bitcoin is drawing renewed attention from traders worldwide.

Strait of Hormuz shock sends crude oil price near $110

The closure of the Strait of Hormuz during the ongoing U.S.-Israel and Iran war has unleashed a historic energy shock, driving crude prices up 17% to nearly $110. This sharp move marks the strongest daily rally in oil since July 2022, as investors brace for a deeper supply crunch and a prolonged regional standoff.

Moreover, the Middle East conflict has triggered a chain reaction across key producers. An Iranian drone strike forced Saudi Aramco to shut its Ras Tanura Refinery, immediately tightening export capacity. At the same time, oil output in Iraq has fallen sharply, while Kuwait Petroleum Corporation has reduced its shipments to global buyers.

Meanwhile, the United Arab Emirates is actively managing offshore production to cope with storage constraints, signaling that capacity is constrained rather than idle. Bahrain has also halted some shipments after a refinery fire, adding another layer of disruption. Together, these events have fueled a broad crude oil price surge that is rippling through global energy and financial markets.

Rising crash risk for U.S. equities and global markets

Against this backdrop, veteran strategist Ed Yardeni has lifted the probability of a U.S. stock market crash this year to 35%, up from 20% previously. He now assigns just a 5% chance to a strong crypto bull run, reflecting mounting caution as energy prices spike and volatility builds across risk assets.

According to Yardeni, the U.S. economy faces a dual threat: higher inflation driven by expensive oil and slowing growth as businesses and consumers absorb the shock. That said, policymakers may struggle to balance inflation control with the need to support activity, which could keep stocks and digital assets under pressure in the coming months.

The stress is already visible across Asia. Japan’s Nikkei 225 index has dropped more than 6%, while South Korea’s Kospi has tumbled nearly 8%, reflecting fears that the energy shock could morph into a broader downturn. Furthermore, prediction market traders on Polymarket now assign a 72% probability that oil will touch $120 by the end of March, underscoring expectations of a deepening global energy crisis.

Bitcoin price resilience amid geopolitical and energy turmoil

In contrast to oil’s violent move, Bitcoin has remained relatively calm. The leading cryptocurrency traded near $67,278, up about 1% over the last 24 hours, showing notable stability while traditional markets grapple with the oil shock and war headlines.

Historically, bitcoin has often declined alongside equities during severe risk-off episodes, despite its narrative as digital gold. However, current price action suggests some degree of bitcoin price resilience as investors reassess its role during geopolitical crises and energy-driven inflation scares.

Even so, analysts warn that if tensions between the U.S., Israel, and Iran escalate further, crypto assets could still face renewed selling. Some forecasts point to potential downside toward $60K if global risk sentiment deteriorates, especially should oil continue to march higher and growth expectations weaken.

Performance of major cryptocurrencies beyond Bitcoin

Other leading digital assets have also managed modest gains despite the turmoil. Ethereum has climbed to around $2,007, while XRP has advanced to $1.35. Moreover, Solana has risen to approximately $84, and Dogecoin has increased to about $0.091, signaling that crypto markets are not yet in full risk-off mode.

Market participants are closely watching how oil and bitcoin react if the conflict broadens or if additional infrastructure in the region is targeted. For now, digital assets appear to be absorbing the shock better than equities, even as energy prices flash warning signs for the broader economy.

Oil and bitcoin at the center of a shifting macro narrative

The interplay between oil and bitcoin is now central to the macro narrative, as investors weigh inflation risks against slowing growth and geopolitical uncertainty. While crude has surged on fears of sustained disruption through the Strait of Hormuz, bitcoin has so far held its ground near $67K, offering a rare pocket of stability.

In summary, the closure of a critical shipping chokepoint, surging energy prices, and rising crash odds in U.S. and Asian markets are reshaping risk appetites. How these forces evolve in the coming weeks will determine whether crypto remains relatively resilient or is eventually pulled into the broader market downturn.