Bitcoin retreated sharply from two-week highs on Wednesday after the U.S. launched military strikes against Iran in response to attacks on commercial tankers in the Strait of Hormuz. The move triggered a broader risk-off sentiment, pushing crypto markets into the red alongside a chip-stock selloff.
Geopolitical Shock Dampens Rally
U.S. Central Command confirmed precision strikes on over 80 targets, including IRGC speed boats and air defense systems, aimed at “imposing heavy costs” for the attacks on three oil tankers. Two tankers were struck by projectiles and one by a drone, though no casualties were reported. The UK’s Maritime Trade Operations raised the regional threat level to “severe.” Oil prices surged over 5% on the news, while Bitcoin tumbled from an intraday high of $64,660 — its strongest level since June 22 — to around $62,600 during Asian trading hours. The total crypto market shed $50 billion in 12 hours.
Retail Sentiment Flips Too Fast
Santiment noted that crowd expectations had swung wildly in recent weeks. After being heavily bearish through June, traders turned bullish as Bitcoin rebounded toward $64,000. “These fast mood swings show how reactive retail sentiment can be when price starts moving,” Santiment remarked, cautioning that markets often move opposite to the crowd. The analytics firm suggested bulls may need a “cool-off” before a cleaner leg up.
Key Levels and ETF Flows
Analyst Ted Pillows flagged the $62,500–$62,800 zone as a critical support. A daily close below that, he warned, could send Bitcoin toward $60,000. Meanwhile, spot Bitcoin ETFs recorded net inflows of $265.7 million on Monday, the second consecutive day of positive flows after late June’s $2.4 billion outflow streak. Daan Crypto Trades highlighted Bitcoin’s correlation to the Nasdaq flipping from -0.87 to +0.72, indicating the asset is trading more like a high-beta tech stock than a hedge.
Broader Market Pressure
U.S. equity markets also fell, with the Nasdaq 100 dropping 2.1% and Micron Technologies down over 9%. The Federal Reserve’s upcoming minutes added to the cautious tone, with traders watching for clues on interest rates. Bitcoin’s apparent demand stayed negative for most of the year, according to CryptoQuant’s Darkfost, even as the recent rally briefly lifted prices. Ether slipped to $1,750, and most altcoins returned to the red, reflecting the market-wide pullback.
