Bitcoin Dives as Israel-Iran Conflict Shakes Markets

Heightened geopolitical tensions spark a broad selloff, wiping out over $400 million in long positions.

Bitcoin’s price took a sharp dive late Thursday, tumbling below the $103,000 mark in the wake of Israeli airstrikes on Iran, which rattled global markets and intensified investor caution. The leading cryptocurrency dropped more than 4%, down from a 24-hour high of $108,500, as fears of a broader conflict in the Middle East triggered a swift exodus from risk assets.

Israeli Strikes Spark Global Market Jitters

The sudden military escalation began when Israeli forces launched targeted airstrikes near Tehran and Tabriz, aiming at what they described as Iranian military infrastructure. According to Israeli officials, the operation was a preemptive measure to counteract perceived threats from Iran’s nuclear ambitions.

Prime Minister Benjamin Netanyahu defended the action, stating that it was necessary to “remove this threat” and emphasizing that the operation would continue “as many days as it takes.” Iran has not issued an official response, though state-run media confirmed explosions and the closure of airspace in parts of the country.

The geopolitical tremors sent shockwaves through financial markets, and the crypto space was no exception. In the last 24 hours alone, more than $427 million in long Bitcoin positions were liquidated, underscoring the scale of investor flight from volatile assets.

U.S. Reacts as Regional Instability Spreads

In response to the deepening crisis, the United States moved to protect its personnel and citizens in the region. The State Department issued urgent advisories urging American citizens to leave Iraq and authorized the voluntary departure of military families from nearby countries.

U.S. Secretary of State Marco Rubio confirmed that Israel acted independently in launching the attacks but had informed the United States ahead of time. Meanwhile, former Trump advisor Steve Witkoff noted that nuclear negotiations with Iran remain “technically on the table,” though he acknowledged the growing risk of escalation in the region.

The developments further fueled global uncertainty, causing a ripple effect across traditional and digital asset markets. Investors, already skittish due to inflation and macroeconomic volatility, found another reason to exit high-risk positions.

Crypto Market Turns Risk-Off

Bitcoin’s retreat wasn’t isolated. The broader crypto market also experienced notable losses:

• Ethereum (ETH) slipped below $2,500
• XRP fell to $2.10, adding to the bearish momentum across altcoins

The synchronized downturn highlights the correlation between crypto prices and geopolitical risk, despite Bitcoin’s reputation among some as a “digital gold” or hedge during times of crisis. Historically, Bitcoin has shown short-term sensitivity to geopolitical unrest, often moving in tandem with risk-off sentiment rather than in opposition to it.

Key Levels and Technical Outlook

At the time of writing, Bitcoin has recovered modestly to $105,574, showing tentative signs of stabilization after Thursday’s steep drop. However, analysts caution that technical levels remain fragile.

• Support level: $104,952
• Resistance level: $108,201

A close above the $105,000 threshold may help stem further selling, but failure to hold that level could pave the way for a retest of the psychologically significant $100,000 mark. Until sentiment shifts, traders and institutional investors are expected to remain on the sidelines or adopt more defensive positioning.

Looking Ahead: Volatility Set to Continue

The prospect of extended conflict in the Middle East continues to loom over global markets. With no immediate signs of de-escalation and uncertainty surrounding Iran’s next move, risk assets are likely to remain under pressure in the near term.

For Bitcoin, the episode serves as a stark reminder of its dual identity: while it may function as a long-term hedge against fiat debasement and systemic risk, its short-term price behavior still closely mirrors investor sentiment in times of crisis.

The crypto community—and the broader financial world—will now be watching closely for diplomatic or military developments that could determine whether Bitcoin finds firm footing above current levels or slides further into correction territory.