Bitcoin (BTC) and the broader cryptocurrency market were back under pressure after US President Donald Trump warned of renewed military action against Iran, effectively ending the fragile ceasefire in place since April.
The flagship cryptocurrency tumbled nearly 2% on Wednesday, falling to a low of $61,453 before settling at $62,237. Others fared equally badly if not worse, with Ethereum (ETH) down 1.34% at $1,732. Ripple (XRP), Solana (SOL), Dogecoin (DOGE), Stellar (XLM), Chainlink (LINK), and other tokens are also trading in the red.
US-Iran Ceasefire Effectively Over
The downturn came after President Trump declared the ceasefire with Iran effectively over. The US launched fresh airstrikes against Iranian assets after the latter attacked three commercial vessels in the Strait of Hormuz. Trump stated during an interaction with reporters that he does not want to deal with Tehran anymore, calling it a “waste of time.”
“To me, I think it’s over. I don’t want to deal with them anymore. Dealing with Tehran is a waste of time.”
Trump’s comments have reignited fears of the conflict escalating once again, as Iran vowed to hit US assets across the Middle East.
The US military stated that it had struck over 80 Iranian targets after three commercial vessels linked to Qatar and Saudi Arabia were attacked in the Strait of Hormuz. Iran accused the US of violating the agreement between them, with Speaker Mohammad Bagher Ghalibaf stating that the US broke the ceasefire by bringing back oil sanctions, launching fresh attacks, and resuming military action in the region.
Markets React
Markets reacted almost instantly, with crude oil prices rising 5% as the market priced in potential supply disruptions. The S&P 500 fell 1% while the Nasdaq 100 dropped 1.5%. The Dow Jones Industrial Average also declined, falling 1.3%. Gold initially rose but failed to maintain momentum, eventually falling around $2.5% to $4,030. The cryptocurrency market followed suit, as CoinGlass data revealed that 125,335 traders were liquidated for $385 million in 24 hours.
BTC, which reached an intraday high of $64,658 on Monday, fell nearly 2% on Wednesday to a low of $61,453 after failing to reclaim $65,000, before settling at $62,237. Analysts have been keeping a close eye on the $64,000-$65,000 zone, which has acted as resistance since early June. Traders now believe BTC could slip to a low of $55,000 before rebounding.
Ethereum (ETH) confirmed a weekly death cross as its 50-week EMA fell below its 200-week EMA. Traders on prediction markets are betting that the altcoin has a 72% chance of dropping to $1,500 before rebounding and reclaiming $3,000. Ripple (XRP) is trading at $1.09, while Solana is at $78. Meanwhile, the Crypto Fear and Greed Index has shown a marginal improvement, rising to 26.
Crude Supplies Could Be Hit
President Trump’s statements fueled concerns about crude oil supply after he threatened to hit key bridges, the electricity grid, and its desalination plants. Trump also hinted that the US could take control of Kharg Island, Iran’s primary oil export terminal. The island is one of the world’s primary energy infrastructure sites, and disruptions could put substantial pressure on oil prices. Market watchers believe any developments around Iran’s oil infrastructure, positive or negative, could have lasting effects on oil, equity, and cryptocurrency markets.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Be the first to comment