Interest Rate Fears Born from High Oil Prices: Virtual Asset Volatility Expected to Continue Ahead of Big Tech Earnings Announcements

▲ Bitcoin (BTC), Nasdaq ©

As geopolitical tensions escalated in the Middle East and international oil prices surged, the virtual asset market faced intense downward pressure, with its total market capitalization plummeting to $2.64 trillion. News of failed negotiations between the US and Iran spread risk aversion, leading to massive leverage liquidations and heightened investor anxiety.

According to investment media FXLeaders on April 28 (local time), a widespread sell-off across the virtual asset market on Tuesday caused the total market capitalization to drop by 1.3%. The leading cryptocurrency, Bitcoin (BTC), plummeted from its Monday peak of $78,225 to around $76,480 before barely finding support near $76,900. Ethereum (ETH), the leading altcoin, also fell by about 1%, hovering around the $2,300 mark.

Major altcoins such as XRP (Ripple), BNB, Solana (SOL), and Tron (TRX) also recorded declines of between 1% and 2%, with particularly steep drops seen in assets that surged last week, including Hyperliquid, Memecore, and Zcash. Forced liquidations totaling $266 million occurred not only in the spot market but also in the derivatives market, of which $210 million came from long positions, exacerbating the downward pressure.

The core reason for this sharp decline is the stalled peace negotiations in the Middle East. Iran proposed a compromise to open the Strait of Hormuz on the condition that the US lift its naval blockade, with nuclear negotiations to be discussed later. However, the situation took a sudden turn when US President Donald Trump abruptly canceled his plan to send a special envoy to Pakistan, which the market perceived as a fatal negative factor.

International oil prices reacted immediately to the news of the failed negotiations, with West Texas Intermediate (WTI) threatening $99 per barrel and Brent crude surpassing $110. Soaring energy prices fueled inflation concerns, which in turn led to fears of delayed interest rate cuts, creating a domino effect of capital outflow from risk assets like virtual assets. The market shock was so significant that even traditional safe-haven assets like gold and silver fell by 1% and 2% respectively.

Related thematic stocks in the equity market were also directly hit. Coinbase plummeted by 1.5%, Circle by 3.5%, and Galaxy Digital by nearly 6%. While the Nasdaq index initially dropped by 0.3% and the S&P 500 remained flat, investors are holding their breath for the earnings announcements from major big tech companies like Alphabet, Meta, Microsoft, and Apple.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*