Crypto market recap: Bitcoin drops below $71,000 after Hormuz blockade

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Bitcoin drops below $71,000

Highlights

BTC fell as low as $70,623 after the United States announced a blockade of the Strait of Hormuz.
The Fear and Greed Index dropped to 12 from 16 a day earlier, pointing to deeper extreme fear.
BTC fell 1.3% over 24 hours and ETH declined 1.4%.

According to Cointelegraph, after Donald Trump said the blockade would go ahead and that peace talks with Iran had failed, Bitcoin first dropped 1.9% to $71,686 and then fell further to $70,623 as U.S. futures markets opened. Oil rose 9.5% over the same period to $105 a barrel.

At the time of writing, Bitcoin was trading at $70,820, down 1.3% over 24 hours. Ethereum stood at $2,187.6, down 1.4% over the same period. Over seven days, however, BTC was still up 2.5% and ETH had gained 2.8%, according to the market snapshot attached to the request.

Oil and geopolitics are driving sentiment again

The escalation around the Strait of Hormuz became the main external factor for the crypto market. About one-fifth of global oil trade normally passes through the route, and any disruption tends to feed quickly into broader markets.

The conflict between the United States and Iran over control of the strait has increased volatility not only in oil, but across financial markets more broadly. The decline spread to other major cryptoassets as investors cut exposure to more volatile instruments.

Despite Sunday’s pullback, Bitcoin has still gained about 7.4% since the start of the U.S.-Iran conflict on Feb. 28, Cointelegraph said. That suggests the current move still looks like a reaction to a new escalation rather than a reversal of the broader trend.

The mood indicator has moved deeper into extreme fear

Another sign of worsening sentiment came from the Crypto Fear and Greed Index. According to Alternative.me, the index stood at 12 on Sunday, down from 16 a day earlier. That places it in the Extreme Fear zone and points to growing caution among market participants.

Such a reading is usually associated with a sharp drop in risk appetite. Against the backdrop of 24-hour declines in both BTC and ETH, the index suggests the market is reacting primarily to an external shock rather than to developments within the crypto industry itself.

For the market, the coming days will depend on whether tensions around the Strait of Hormuz persist and whether oil continues to rise. With Bitcoin still above $70,000, Ethereum above $2,100, and the Fear and Greed Index at 12, the crypto market remains under pressure from geopolitics and the commodity market.

What this correction shows

Despite the sharpness of the latest move, the market does not yet look broken in a broader sense. Since the start of the U.S.-Iran conflict on Feb. 28, Bitcoin is still up about 7.4% and has outperformed both the S&P 500 and gold over the same period. But the latest pullback shows that crypto remains sensitive to macroeconomic and geopolitical shocks, especially when they are transmitted through the oil market.

That is what is shaping the broader picture right now: Bitcoin is still holding above $70,000, Ethereum remains above $2,100, but a Fear and Greed Index reading of 12 suggests that market participants are not ready to return to risk quickly. As long as oil prices keep rising and tensions around Hormuz persist, the crypto market is likely to remain nervous and headline-driven.

We also reported that oil surges above $100 after U.S. announces naval blockade of Iran.

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