Oil prices surpass $100, why does the crypto market "collapse" first?

On April 2nd, WTI crude oil broke through $110, and the crypto market plummeted simultaneously—nearly $400 million in liquidations across the entire network, funding rates turned significantly negative, and traders actively shorted Bitcoin and Ethereum.

This is no coincidence. The linkage between oil prices and crypto assets is driven by two clear transmission chains.

Transmission Chain One: Inflation Expectations → Delayed Rate Cuts → Liquidity Tightening

Rising oil prices directly increase energy costs. The latest forecast from U.S. banks predicts that overall inflation will reach 3.6% by 2026, well above the previous estimate of 2.8%. UBS pointed out that the increase in oil prices introduces new inflation risks, making the Federal Reserve more cautious, and raising the threshold for rate cuts. Even if the U.S. announces an end to the war, oil prices could remain near $100 throughout the year, further delaying rate cut expectations.

For the crypto market, delayed rate cuts mean the "big story" of liquidity easing is postponed, with high-valuation assets being the first to be affected.

Transmission Chain Two: Rising Mining Costs → Increased Selling Pressure from Miners

Oil price increases push up electricity costs, directly impacting Bitcoin mining profitability. Some miners are forced to sell BTC to maintain operations, adding short-term supply pressure to the market. This explains why Bitcoin has performed noticeably weaker than other assets over the past week.
$XTIUSD

April Strategy Reference

If oil prices remain above $100, the crypto market will still face macro headwinds. Operational suggestions:

· Reduce leverage to avoid liquidation during sharp news-driven volatility
· Watch for oil price correction windows; if it falls below $100, short-sellers may face short squeeze risks, and Bitcoin could rebound to the $70,000–$74,000 range
· Pay attention to the OPEC+ meeting results on April 5th; if there are clear signals of increased production, it could serve as a catalyst for a temporary peak in oil prices

#國際油價走高