Asian Markets Open Higher, Crypto at Inflection: Analyst Flags Oil and Inflation Risks

Asian equity markets began the week on a positive note, with Japan and South Korea leading gains on Monday. However, analysts pointed to oil prices and inflation as key factors that could influence market direction in the coming days.

In a market commentary, Nischal Shetty, founder of cryptocurrency exchange WazirX, noted that Asian equities are being supported by stronger US growth expectations. He said Japan and Korea are particularly benefiting from the artificial intelligence and chip cycle. According to reports, Japan's Nikkei and South Korea's KOSPI were up around 2% and 3% on the day.

Shetty observed that the crypto market is entering a "more complicated macro environment." He highlighted that a combination of oil prices above $90 per barrel, rising bond yields, and stronger-than-expected US jobs data is prompting markets to reassess the path of interest rates. For cryptocurrencies, this could mean near-term pressure, as higher yields make risk assets less attractive and reduce expectations of easier liquidity.

The analyst also drew attention to escalating tensions in the Middle East and the potential for sustained energy inflation, which add another layer of uncertainty. He posed the question of whether the current situation is a temporary risk-off shock or the beginning of a broader inflationary cycle. "If yields continue climbing, volatility could stay elevated; but if markets eventually look past the geopolitical shock and rate expectations stabilise, crypto can regain its momentum," he said.

Shetty offered technical observations for Bitcoin and Ethereum. He identified $77,500 as a key support level for Bitcoin, with $82,300 as a crucial resistance. "If BTC can decisively break and sustain above $82,300 with healthy volumes, the next zone to watch is $84,000-$85,000. On the other hand, a sustained move below $77,500 could trigger a deeper retracement," he said. He advised futures traders to watch the $82,300 level on the upside with controlled open interest growth.

For Ethereum, he noted that $2,550 remains key resistance. A strong, volume-backed breakout above it could open the path towards $2,800-$3,000. On the downside, $2,438 is the level that bulls need to defend. A weekly close below it could bring $2,220 and eventually $2,000 into focus, he explained.

Referring to recent market activity, Shetty mentioned a $404 million liquidation day, where long positions suffered almost twice the losses of short positions. He interpreted this as leverage being cleared out near resistance. "Flushes like this are healthy as they reset market positioning before the next move up," he said.

It is important to note that these are the views of the analyst and do not constitute investment advice. Markets are subject to risks, and investors should exercise caution.