Quiet bitcoin BTC$71,361.82 price action in the $74,000 area was shattered Wednesday morning on reports of military escalation in Iran and then February inflation data that came in far stronger than expected.

The declines started as U.S. President Donald Trump struck a more aggressive tone on Iran, suggesting further escalation in a series of Truth Social posts and calling the country the "NUMBER ONE STATE SPONSOR OF TERROR."

Alongside, Iran's state TV reported that part of that country's South Pars gas field was attacked.

This followed reports that Israel killed Iran’s Intelligence Minister Esmail Khatib, while the U.S. deployed 5,000-pound bunker-buster bombs targeting missile sites near the Strait of Hormuz, a key route for global oil flows.

That news combined to send the price of WTI crude oil from as low as $92 per barrel overnight to nearly $96.

Minutes later, the U.S. Producer Price Index for February rose 0.7% versus just 0.3% expected and up from January's 0.5%. The core PPI rose 0.5% versus 0.3% expected, though down from January's 0.8%. Importantly, the disturbing inflation data is from prior to the attacks against Iran and the subsequent sharp rise in the price of oil.

The data complicates the outlook for rate cuts, especially with oil prices still elevated, and is weighing on risk assets ahead of the U.S. stock market open.

Bitcoin has now fallen to near $71,000, down 3.5% over the past 24 hours. Declines for ether (ETH), solana (SOL) and XRP (XRP) are closer to 5%. U.S. stock indexes are posting just modest losses, the Nasdaq and S&P 500 lower by 0.4%.

Precious metals are also being caught up in the selloff, with gold quickly sliding 2.5% to $4,885 per ounce.

Fed comes later

Later in the day, the U.S. Federal Reserve is widely expected to hold rates steady, shifting the focus to Chair Jerome Powell’s messaging and how policymakers interpret the recent mix of growth risks and inflation pressures. Trump once again renewed calls for rate cuts in a Wednesday post, adding a political dimension to the meeting.

UPDATE (March 18, 15:13 UTC): Updates prices with bitcoin falling further towards $71,000.