Bitcoin’s weekend rally came to an abrupt halt on Sunday as the cryptocurrency fell below $74,000, largely influenced by escalating tensions between the US and Iran. After hitting a peak of $78,300 late Friday on Coinbase—the highest level since early February—the digital asset saw a steady decline throughout Saturday and early Sunday, fluctuating between $75,000 and $76,000. The downturn coincided with Iran’s announcement that it would close vital oil routes in the Strait of Hormuz, a critical passage for global oil shipping.
The situation escalated dramatically late Sunday when the US military confirmed it had fired upon and subsequently seized an Iranian cargo ship. The military alleged that the vessel attempted to breach its blockade of Iranian ports, leading Iran to accuse the US of breaching a recently established ceasefire. This ceasefire, which had been in place for two weeks and contributed to a degree of market stability and moderated oil prices, is set to expire on Wednesday.
In the wake of the US military’s actions, Tehran has expressed its intention to respond and has dismissed the prospect of new peace discussions scheduled for Monday in Islamabad, citing the US blockade as the reason for their withdrawal from the talks.
As investor sentiment reflected the rising geopolitical tensions, US stock futures experienced notable declines Sunday night. S&P 500 futures dropped by 0.8%, while Nasdaq-100 futures fell by 0.6%. The Dow Jones futures were down approximately 450 points, representing a 0.9% decline.
In the oil market, news of the hostilities led to significant price surges, with crude oil futures climbing over 4.5%, surpassing $95 a barrel. The Crypto Fear & Greed index registered a two-point increase on Monday, reaching 29 out of 100. While this marks the highest score since late January, it still indicates a prevailing sentiment of fear among cryptocurrency investors.
