Bitcoin plunged below $77,000 following US military strikes on Iranian IRGC targets on Tuesday at 12:00 PM Eastern Time (ET). Ethereum tracked the downward move, falling below the $2,400 mark.
CoinGlass data shows $115 million in leveraged long positions were wiped off exchanges in just 60 minutes. Bitcoin had previously managed to hold the $78,000 level when the initial wave of attacks occurred on Sunday. However, Tuesday afternoon’s escalation finally broke that support level, eroding the market’s August gains when Bitcoin posted a 23% rally before early September’s geopolitical headwinds hit.
Strait of Hormuz Targets and Surging Oil Prices
US Central Command (CENTCOM) stated the operation targeted Iranian radar and military facilities linked to threats against commercial merchant vessels. Renewed military tensions near the Strait of Hormuz immediately forced commodity markets to reprice energy assets.
Brent crude rose 4.6% to $94.65 per barrel, while WTI crude jumped 5.2% to $90.22. The situation escalated after two tankers were reportedly struck while departing the Strait of Hormuz. Roughly one-fifth of global daily oil and liquefied natural gas (LNG) supply passes through the strait, fueling fresh fears of worsening global inflation.
Drone Retaliation and Wall Street Dragged Down
Iran responded to the direct US strikes by launching missiles and deploying drone swarms. The exchange of fire stood in sharp contrast to earlier remarks from President Pezeshkian, who had stated Tehran was ready to return to the ceasefire framework drafted in June.
Donald Trump weighed in, calling the operation a “big and powerful” move while warning that any strikes from Iran would be met with even harder hits. Fears of an expanding conflict quickly spilled over into traditional markets, dragging the S&P 500 index down to its lowest level since August 4 and pushing US Treasury yields higher.
Macro Market Recalculation
Open conflict across a major oil supply artery brings one clear calculation for investors: higher inflation. Surging commodity prices delay central bank plans to cut interest rates in the near term. As long as interest rates remain at peak levels while the conflict persists, capital will continue to rotate out of risk assets like crypto and into safe-haven government bonds.
Reported via crypto.news.
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Previously: US Strikes Iranian Missile Launchers in the Strait of Hormuz - But Crypto Markets Feel the Shockwaves
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
