Bitcoin fell below $73,000 on Thursday, hitting its lowest level in more than six weeks,
as new US military strikes on Iran dampened risk appetite and triggered a wave of sell-offs in cryptocurrency markets.
The world's largest cryptocurrency was trading down 4% at $72,782.9 as of 09:38 Moscow time, hitting a new low since mid-April.
Ether, the second-largest token by capitalization, fell 5% to $1,975.63, its lowest level in two months.
US strikes Iran again; oil is recovering
Investor sentiment was dampened by reports that the US carried out a second round of strikes on Iran this week, dampening hopes of a speedy peace settlement and pushing oil prices higher again.
Brent crude recovered above $97 a barrel after falling in the previous session amid optimism about possible negotiations between Washington and Tehran.
Markets briefly rose on Wednesday after Iranian state-linked media reported progress on a framework agreement that could resume shipping through the Strait of Hormuz. However, those hopes faded after US President Donald Trump rejected reports that Iran and Oman would jointly control shipping operations under the proposed agreement.
Rising oil prices and escalating geopolitical tensions have reduced interest in risky assets, including cryptocurrencies. In addition, investors were preparing for the release of US inflation data on Thursday, which could affect expectations regarding Federal Reserve interest rates.
Bitcoin under pressure from institutional selling
Additional pressure on Bitcoin came from continued institutional selling and significant outflows from spot Bitcoin ETFs.
According to SoSoValue, on May 27, US spot Bitcoin ETFs recorded a net outflow of $733.43 million - one of the largest single-day figures in recent weeks.
Crypto ETFs have recorded cumulative net outflows of more than $2.5 billion over the past two weeks. Analysts also noted reports of a $1.29 billion dark pool block trade associated with BlackRock's iShares Bitcoin Trust ETF (IBIT), which coincided with Bitcoin's sharp turnaround earlier this week.
The latest decline continued Bitcoin's pullback from highs above $82,000 recorded earlier this month. Traders are increasingly concerned that persistent inflation and high energy prices could keep U.S. interest rates elevated for longer.