The cryptocurrency market suffered a sharp decline on Friday, May 8, as escalating military tensions between the United States and Iran triggered a broad risk-off move across global assets. Total market capitalization fell nearly 3.8% to around $2.61 trillion, with more than $344 million in long liquidations amplifying the downward pressure.
The sell-off intensified after Iran's military accused U.S. forces of targeting an Iranian oil tanker and launched missiles, drones, and fast boats against American warships transiting the Strait of Hormuz. U.S. Central Command confirmed it struck Iranian military facilities in response.
Bitcoin dropped roughly 4.5%, briefly slipping below the $77,000 mark before recovering to trade near $77,400 at press time. Reports also noted an intraday low of $79,679, reflecting the volatility. Ethereum fell over 6% to around $1,980. Major altcoins including Solana, XRP, BNB, and Dogecoin recorded steep losses, with high-beta meme tokens suffering double-digit declines.
The Crypto Fear and Greed Index tumbled 9 points to 38, re-entering fear territory. Investor sentiment soured as capital rotated into traditional safe havens—gold strengthened and oil prices rose on fears of disruption in the critical shipping lane. The S&P 500 hit fresh record highs above 7,300, driven by tech earnings, further diverting funds from crypto.
Adding to the pressure, Strategy Inc. (MSTR) signaled it might sell Bitcoin to fund dividends, described by Michael Saylor as a move to "rip your wings off short sellers." Despite the intraday rout, Bitcoin remained on track for a sixth consecutive weekly gain, with key support at $79,000 needing to hold.
