Bitcoin Drops 1.3% to $101,501.8 Amid Middle East Tensions

Bitcoin experienced a significant decline on Monday, extending its losses from the weekend. The cryptocurrency fell by 1.3% to $101,501.8 by 01:35 ET (05:35 GMT), reaching a low of $99,000 on Sunday. This drop marked a break from the $103,000 to $108,000 trading range that had been maintained throughout most of June, although it managed to hold above the $100,000 level.

The decline in Bitcoin's price was largely attributed to the escalating tensions in the Middle East following U.S. strikes against Iran's nuclear infrastructure. The attacks, which targeted three key sites, were claimed by President Donald Trump to have been successfully executed. However, these claims could not be immediately verified, and the United Nations' nuclear watchdog reported no immediate increase in radiation levels around the facilities.

Iran responded to the attacks with strong condemnation and warnings of potential retaliation. There were reports suggesting that Iran could block the Strait of Hormuz, a critical shipping channel for Asia and Europe. Such an action could lead to significant economic disruption in the regions, particularly affecting oil shipments. The potential blockade caused crude oil prices to rise sharply on Monday, raising concerns about energy-driven inflation and its impact on global interest rates.

While cryptocurrencies are not directly influenced by economic disruptions, their speculative nature makes them vulnerable to shifts in market sentiment. The recent hawkish comments from the Federal Reserve had already put pressure on crypto markets, as investors feared that U.S. interest rates would remain higher for an extended period. This sentiment was further exacerbated by the geopolitical tensions, leading to a broader retreat in crypto prices.

Other major cryptocurrencies also followed Bitcoin's downward trend. Ether, the world's second-largest cryptocurrency, fell by 1.9% to $2,247.59. XRP saw a decline of 2.5% to $2.0299, while Cardano and Solana each dropped by more than 1%. Among meme tokens, Dogecoin fell by 1.3%, and $TRUMP decreased by 1.6% to $8.706.

Investors are now focusing on upcoming cues from the Federal Reserve, with Chair Jerome Powell scheduled to testify before Congress starting from Tuesday. The market's risk appetite remains fragile, and any further developments in the Middle East or comments from the Fed could continue to influence crypto prices in the coming days.