Bitcoin's price fell below $71,000, sparking new concerns among global investors and this fall is not just a normal technical movement, but is due to the escalating geopolitical tensions between the United States and Iran.
At the time of writing, Bitcoin is currently at $71,113, down 0.03% since it opened early Monday in Asian trading.
It all started when important talks between the two countries held in Islamabad, Pakistan failed to reach an agreement, particularly regarding the issue of Iran's nuclear program.
This failure sparked new uncertainty, especially after Donald Trump issued a firm statement that the United States is ready to block the world's strategic route, the Strait of Hormuz.
Any disruption in this area could sharply increase oil prices, thus increasing inflationary pressures worldwide.
In fact, analysts have predicted that the US inflation rate could jump above 4% if this conflict drags on.
In this atmosphere of uncertainty, investors are taking a cautious approach by selling high-risk assets such as crypto. Bitcoin, as the most dominant asset in the market, was the main victim when it fell by around 3% in a short period.
To make matters worse, market data shows that almost $350 million in long positions were liquidated in a 24-hour period.
Unlike traditional stock markets with limited trading hours, crypto operates 24 hours a day, non-stop. This makes Bitcoin an ‘early barometer’ of global risk sentiment.
When bad news comes, crypto will fall before other assets have a chance to react. However, behind this decline, there is also a more optimistic view.
Some analysts believe that if this conflict weakens the global economy, the Federal Reserve may have no choice but to loosen monetary policy, including printing more money to stimulate the economy.
This scenario could indirectly benefit Bitcoin in the long run, as digital assets often benefit from increased liquidity in the financial system.
For now, all eyes are on the next developments, whether the conflict will subside through diplomacy or continue to escalate into a larger crisis.
Economic data such as producer inflation (PPI) and speeches by central bankers will also play a key role in determining the market's next direction.
