- Bitcoin fell below $70,000 on Thursday as reports emerged of U.S. military plans for potential ground and aerial operations in Iran.
- On-chain analysis from Glassnode shows key support at $70,200, but the modest size of the buying cluster makes a breakdown likely.
- A researcher at HashKey Group warned the rally has been fueled by leverage, leaving Bitcoin vulnerable to a sharp, fast pullback.
- Prediction markets now see a 60% chance of U.S. ground forces in Iran before May, reflecting heightened geopolitical uncertainty.
Bitcoin slipped back under $70,000 Thursday morning, pressured by reports that the Pentagon is preparing military options in Iran, according to Axios. The leading cryptocurrency is now testing a critical support level as geopolitical tensions escalate.
Traders on the prediction market Myriad now assign a 60% chance of U.S. boots on the ground in Iran before May. Consequently, Bitcoin finds itself caught between two significant price clusters identified by on-chain data.
A Glassnode report shows the cost basis for short-term holders is roughly $70,200. However, the accumulation at this level remains modest in size, “The higher probability of a breakdown below this level cannot be dismissed until a more substantial base of committed buyers is established,” the report noted.
Tim Sun, a senior researcher at Hong Kong-based HashKey Group, told Decrypt the $70,200 support will likely face repeated tests. He described recent buying activity as “defensive accumulation than confirmation of a new trend-driven rally.”
The market is pricing in extreme volatility, with the VIX fear gauge hitting a six-month high, according to The Kobeissi Letter. Meanwhile, Sun warned that a break below $70,000 is possible, as the rally has been leverage-driven.
Ultimately, the vulnerable on-chain support and intense macro uncertainty set up a pivotal weekend for Bitcoin’s price. Myriad users are evenly split, assigning a 50% chance of a retest at $84,000 or a sharp downturn.
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