The cryptocurrency market experienced a sharp downturn over the weekend of February 28, 2026, as escalating geopolitical tensions triggered a broad flight from risk assets. The immediate catalyst was news of U.S. and Israeli strikes on Iran, which broke while traditional equity and bond markets were closed, leaving the 24/7 crypto market as the primary outlet for panic selling.
The sell-off was severe and rapid. According to market data, over $460 million in leveraged positions were liquidated intraday. The total crypto market capitalization plummeted from approximately $2.26 trillion to $2.21 trillion in a matter of hours. Bitcoin (BTC) fell roughly 3.8%, hitting a local low near $63,308. Ethereum (ETH) dropped between 4.5% and 6.5%, trading around $1,835. Higher-risk altcoins like Solana (SOL) and XRP saw even steeper declines, with some exceeding 10%.
Amid the chaos, tokenized gold assets emerged as clear safe-haven winners. Capital rotated decisively into gold-backed tokens, with PAX Gold (PAXG) and Tether Gold (XAUT) both surging more than 5% during the day. Trading volume for PAXG on exchanges like OKX and Binance spiked dramatically as tensions intensified. The market cap for the tokenized gold sector saw a significant surge by late February 2026.
Analysts note that these assets, backed 1:1 by physical gold and traded on blockchain networks, are being used as a bridge between traditional safe havens and the digital asset ecosystem. Their technical charts showed resilience, with PAXG and XAUT maintaining bullish structures above key support levels—$5,000-$5,100 for PAXG and $5,100-$5,200 for XAUT—while the broader crypto market bled.
The event highlighted crypto's role as a "global pressure valve" during traditional market closures and exposed the fragility of leveraged positions, which created a cascading liquidation effect. Attention now turns to critical support levels, with the $60,000–$63,000 range seen as vital for Bitcoin to prevent a deeper market downturn.
