Bitcoin fаlls to April low as new U.S. strikes on Iran hit risk assets

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Bitcoin fаlls to April low

Highlights

The cryptocurrency market’s capitalization fell by about $80 billion in 24 hours.
Bitcoin dropped to its lowest level since April 13, and lost about 3.5% on the day.
Ethereum fell below $2,000 and declined more than 4%.

Market quickly reverses after deal hopes

According to Cointelegraph, the selloff accelerated after reports that the U.S. military carried out strikes on an Iranian military facility late Wednesday and shot down four Iranian attack drones near the Strait of Hormuz. A U.S. official said the drones posed a threat, while describing the American actions as defensive and aimed at preserving the cease-fire.

Iran’s Islamic Revolutionary Guard Corps said it responded with an attack on a U.S. air base in Kuwait. The escalation came as negotiations continued to end the war that began on Feb. 28 after U.S. and Israeli strikes on Iran.

Earlier in the week, cryptocurrencies had risen on expectations of a possible diplomatic breakthrough. But President Donald Trump told a Cabinet meeting at the White House that he was not satisfied with the terms of the Iran deal and suggested that further military action remained possible. For the market, that was a signal that a compromise was not close.

Bitcoin and Ethereum trade like risk assets again

Bitcoin lost about 3.5% on the day and fell to $72,646 on Coinbase, its lowest level since April 13. Later, market data showed it trading near $73,191.81, down 3.5% over 24 hours and 5.9% over the week.

Ethereum also came under pressure. The second-largest cryptocurrency by market capitalization fell below the psychologically important $2,000 level and declined more than 4% to $1,976. Market data later showed ETH trading around $1,988.59, down 4.6% over the day and 6.5% over seven days.

The selloff showed that during periods of sharp uncertainty, cryptocurrencies still do not behave like safe-haven assets. Investors are pricing in the risk of a wider conflict, possible disruptions to oil supplies and stronger inflation pressure. Against that backdrop, some capital is moving into more traditional defensive assets, while liquidity in the crypto market is tightening quickly.

Geopolitics sets the price of risk again

The U.S. strikes came at a time when the oil market was already closely watching developments around the Strait of Hormuz. Oil prices also rose: WTI gained more than 3.5% and moved above $92 a barrel, while Brent approached $98.

For the crypto market, this matters not only because of the direct reaction to military news. More expensive oil could strengthen inflation expectations and complicate the Federal Reserve’s policy outlook. If investors begin to expect tighter financial conditions, pressure on Bitcoin, Ethereum and other risk assets could continue.

It was earlier reported that $1.29 billion BlackRock Bitcoin ETF sale adds pressure on BTC.

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