Bitcoin fell on Tuesday, slipping below $69,000 as risk appetite waned ahead of U.S. President Donald Trump's deadline for Iran to reopen the Strait of Hormuz or face possible military action.
The world's largest cryptocurrency was trading down 0.8% at $68,525.1 by 11:06 Saudi time.
Bitcoin briefly rose above $70,000 on Monday due to optimism about a possible ceasefire, but failed to hold onto the gains.
Traders brace for US strikes on Iran as deadline approaches
Morale deteriorated after Iran rejected a US-backed ceasefire proposal and instead demanded broader terms, raising the prospect of further escalation.
Trump warned that Iran could be destroyed if it failed to comply by the 4:00 AM Saudi time deadline, including threats to target key infrastructure such as power plants and bridges.
The confrontation has caused concern in global markets, with oil prices rising above $110 a barrel due to the disruption in the Strait of Hormuz, a key artery for global crude oil flows.
The rise in energy prices has fueled inflation fears and pushed investors toward traditional safe-haven assets such as the US dollar.
Bitcoin has increasingly traded in line with broader risk sentiment, as geopolitical uncertainty has overshadowed earlier optimism about diplomatic progress.
Attention also turns to US economic data, particularly the March Consumer Price Index report due later on Friday. Higher energy prices linked to the conflict in the Middle East are expected to push inflation higher, potentially reinforcing expectations that interest rates will remain elevated for an extended period.
These expectations could pose an additional obstacle for Bitcoin, which typically struggles in a high interest rate environment.
Cryptocurrency prices today: Altcoins continue to lose
Most alternative currencies also declined on Tuesday, continuing losses amid a climate of caution.
The world's second-largest cryptocurrency, Ethereum, fell 1.5% to $2,103.92.
The world's third-largest cryptocurrency, XRP, fell by 2.4% to $1.31.
Solana and Polygon each fell by 3%, while Cardano dropped by more than 4%.
Among the meme currencies, Dogecoin fell by 1.5%.
