Bitcoin fell below $70,000 in Asian trading on Wednesday as investors monitored developments in the Middle East conflict and awaited key US inflation data later in the day.
The world's largest cryptocurrency was trading down 0.5% at $69,583.5 by 09:55 Saudi time.
Bitcoin rebounded from a temporary slide towards the mid-$60,000s earlier this week, as markets tried to gauge the economic fallout from the escalating US-Israeli war with Iran.
Traders weigh mixed signals from the Iran war
Risk sentiment across financial markets has been closely linked to the conflict, which has disrupted energy supplies and threatened shipping through the strategic Strait of Hormuz.
Oil prices rose at the start of the week after the de facto closure of the Strait of Hormuz raised fears of a supply shock, briefly pushing crude to nearly $120 a barrel.
Prices later fell after US President Donald Trump said on Monday that the conflict could end soon, easing some of the market anxiety.
However, signs of a swift de-escalation remain limited. Fighting between US, Israeli, and Iranian forces around the Gulf continues, keeping investors cautious about the outlook for global growth and inflation.
US Consumer Price Index looms; lawmakers try to revive stalled transparency bill
Market participants are also awaiting the release of US consumer price index data later on Wednesday, which could influence expectations for the Federal Reserve's interest rate path and risk appetite across assets, including cryptocurrencies.
Meanwhile, attention in Washington remained focused on efforts by US lawmakers to revive the stalled CLARITY cryptocurrency law, with senators reportedly exploring a compromise on rules governing returns on stablecoins, an issue that has been a major point of contention between banks and cryptocurrency companies.
The proposed legislation aims to provide clearer regulatory oversight of digital assets, which supporters say could help open up more institutional participation in the cryptocurrency market.
Cryptocurrency prices today: Altcoins are also quiet
Most alternative currencies remained near the flat line on Wednesday.
Ethereum, the world's second-largest cryptocurrency, lost 1% to reach $2,018.44.
The world's third-largest cryptocurrency, XRP, fell 0.6% to $1.37.
Solana fell by 0.7%, while Cardano and Polygon each declined by 0.5%.
Among meme symbols, Dogecoin has traded largely flat.
