Bitcoin is hovering near $63,000 after falling more than 1% since midnight UTC amid a wider wave of risk-off sentiment following the U.S. and Iran mutual airstrikes over the weekend.

Brent crude futures rose more than 3% to approach $79 a barrel as the renewed fighting raised concerns over shipping through the Strait of Hormuz, a vital oil passageway. Higher energy prices add inflationary pressure and reduce the scope for easier monetary policy, a link that weighed on bitcoin during earlier oil shocks.

“This week, crypto markets will experience a ‘tug-of-war’ between macro and geopolitics,” Taran Dhillon, head of digital assets at Kula, told CoinDesk.

U.S. inflation data coming this week will shape interest-rate expectations, Dhillon said.

Still, spot bitcoin and ether ETFs just broke eight-week streaks of outflows, a sign of growing demand for the two largest cryptocurrencies.

Regulatory clarity may add further tailwinds, Dhillon noted, as the Clarity Act advances. While ethics provisions are still being discussed, “even incremental progress matters,” he said.