Bitcoin Falls 4.4% to $66,348 as Middle East Conflict Escalates
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Bitcoin's (BTC-USD) brief reclaim of $70,000 did not hold. After pushing above that level, the cryptocurrency reversed sharply, falling as much as 4.4% to $66,348 and trading near $66,800 at 5:50 a.m. in New York. The retreat accelerated as European markets opened under pressure, with the Stoxx Europe 600 Index down more than 3% and heading for its largest two-day drop since April. The move unfolded as investors reacted to escalating tensions in the Middle East, which appeared to weigh on risk assets across the board.
The broader digital asset space followed the same pattern. Ether and Solana declined as investors stepped back from higher-volatility positions, even though US spot Bitcoin exchange-traded funds had recorded $458 million in inflows the prior day. The shift in tone came after the US and Israel launched a bombing campaign against Iran over the weekend, with Iran increasing attacks on the US and its allies in the region and threatening to close the Strait of Hormuz, a key trade route. Oil prices spiked on concerns about potential disruption, while the MSCI Asia Pacific Index fell as much as 2.8% in its worst two-day slump since last April. South Korea's Kospi Index, described as the world's second-best-performing stock market this year, dropped as much as 6.9%, marking its biggest decline since August 2024.
Market observers framed the volatility in different ways. Petr Kozyakov, chief executive of crypto payments platform Mercuryo, said Bitcoin is again acting as a hair-trigger indicator for traditional financial markets. Pratik Kala, head of research at Apollo Crypto, characterized the move as a cooling-off period following a strong rally on high volumes, noting that Bitcoin has traded between $65,000 and $70,000 since early February and that moves above that range tend to invite profit-taking. The recent reaction to geopolitical shocks may also challenge the digital gold narrative promoted by some advocates, particularly as bullion advanced for four consecutive sessions before edging lower on Tuesday.
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