Bitcoin Drops 11.5% to $98,500 After US-Iran Tensions

Bitcoin prices experienced a significant drop below $100,000 for the first time since early May, but BitMEX co-founder Arthur Hayes believes this weakness is temporary. The price decline occurred following a US airstrike on Iranian nuclear facilities over the weekend, with Bitcoin falling to its lowest level in over six weeks, dipping below $98,500. However, the asset quickly recovered, reclaiming $101,000 during early trading in Asia on Monday morning.

Hayes expressed optimism, stating that the "weakness shall pass" and that Bitcoin will "leave no doubt as to its safe haven status." He attributed this expected recovery to more central bank money printing. This sentiment aligns with the broader view that Bitcoin's role as a safe haven asset will become more pronounced as traditional financial systems face increasing instability.

The recent price action has been characterized by volatility, with Bitcoin experiencing a five-week consolidation phase. This period has seen three failed attempts to break above $110,000 due to short-term macroeconomic shocks, including tariff concerns in May and the Israel–Iran escalation in June. These events have highlighted that Bitcoin is not currently behaving as a risk-off hedge, according to Markus Thielen, head of research at 10x Research. Thielen noted that as long as Bitcoin remains above the short-term realized price of $98,000 and the $102,000 trend support, traders can continue to look for tactical rally opportunities. However, a break below this range would shift the focus to risk management, especially in the absence of strong upside catalysts.

Thielen expects the sideways trading to continue for a few months, suggesting a consolidation phase over the summer. This view is supported by the strong institutional demand for Bitcoin, as noted by Eugene Cheung, chief commercial officer at digital asset platform OSL. Despite the brief dip below $100,000 amid heightened geopolitical tensions, Cheung remains bullish, citing strong institutional support and long-term bullish sentiment. He emphasized that structural demand for both Bitcoin and Ether persists, highlighting crypto’s sensitivity to macro risks and its ability to absorb shocks while continuing in a general bullish trend.

Meanwhile, Nick Ruck, director at LVRG Research, suggested that altcoins could start to perform better in the coming months. While Bitcoin’s volatility has been the focus after the US-Iran escalation, the altcoin market is showing signs of divergent strength. Ruck noted that if macro conditions stabilize and crypto-specific catalysts gain traction, altcoins could outperform Bitcoin. This perspective adds another layer to the current market dynamics, where Bitcoin's role as a safe haven asset is being tested, and altcoins are poised to capitalize on any stabilization in the broader market.