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Surging Oil Prices and Inflation Data Will Rattle Crypto Markets This Week

Crypto markets saw another red Monday morning as digital assets erased last week’s gains and returned to their sideways channel.

The only thing going up at the moment is oil prices, with crypto, commodities, and US stock futures all falling on Monday morning.

President Donald Trump said oil prices “will drop rapidly” when the “Iran nuclear threat is over,” adding that it is a “very small price to pay.”

Economic Events March 9 to 13

Crude oil prices have skyrocketed to $116 per barrel as oil futures opened higher on Sunday evening. This has resulted in major volatility in stock futures and crypto markets, which are falling.

The Kobeissi Letter described it as “one of those days that will be referenced for decades to come,” with oil prices surging 25% on a Sunday, US stock market futures erasing over $2 trillion, and “20 million barrels per day of oil supply offline with no signs of deescalation,” it added.

The week ahead will add to that volatility, starting on Wednesday with February’s CPI (consumer price index) inflation data. There is only one way inflation can go with fuel prices skyrocketing.

The delayed January reading of the Federal Reserve’s preferred inflation gauge, the personal consumption expenditures (PCE) price index, is due on Friday, adding fuel to the fire.

The timing is significant ahead of the Fed’s rate-setting meeting on March 18, which has a 95.5% probability of no rate changes, according to CME Group futures markets.

The PCE print is expected to show that prices increased 0.4% month-on-month in January, matching December’s pace, and would be the second consecutive “hot” reading.

Surging gasoline prices tied to the Middle East conflict could influence inflation expectations and consumer spending behavior, as broader markets go into selloff mode.

Crypto Market Outlook

High-risk crypto assets are particularly sensitive to geopolitical conflict, and markets have retreated $40 billion over the weekend to $2.36 trillion.

Bitcoin saw resistance at $68,000 on Sunday and tanked below $66,000 before a marginal recovery during Asian trading on Monday morning. The asset remains in the middle of its range-bound channel but is heading for the lower bands.

Ether prices saw similar declines, failing to reclaim $2,000 over the weekend and falling back to $1,960 at the time of writing. The altcoins were mostly flat over the past 24 hours.

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