- Bitcoin dropped 1.8% as escalating US-Iran tensions rattled global markets.
- Over $336 million was liquidated from crypto markets in a single day.
- Analysts note crypto is trading in lockstep with equities, not as a safe haven.
- The price of crude oil spiked past $100 a barrel amid threats to close the Strait of Hormuz.
- Market recovery hinges on geopolitical de-escalation and clarity from the US Federal Reserve.
Crypto and wide financial markets tumbled on Monday as the US and Iran escalated threats, sending oil prices seesawing. US President Donald Trump posted a warning to Iran on Sunday, prompting a response threatening to close the Strait of Hormuz.
Bitcoin, often touted as a digital safe haven, dropped to $68,160, recovering from a low below $67,600. This price decline triggered a massive $336.3 million in market liquidations, according to CoinGlass, with $100 million from failed Bitcoin long bets.
Analyst Rachael Lucas from BTC Markets told Cointelegraph that crypto “is trading in lockstep with equities right now, not as a haven.”. She added that market sentiment sits at historic lows, with the Fear and Greed Index in “extreme fear” territory.
Consequently, Asian stock markets also fell, with Japan down over 4%. The price of crude oil spiked to over $100 a barrel before settling near $99.30.
Meanwhile, Brent crude oil jumped above $114, feeding inflation expectations. Lucas stated the future hinges on Iran and the Fed, noting the probability of a rate hike jumped to 12.4%.
She identified $68,000 as Bitcoin’s immediate support level, with $65,800 being the next. However, Bitcoin still saw $1.43 billion in ETF inflows this month, suggesting institutional support remains strong.
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