Bitcoin Drops 5% to $103,395 as Trump's Iran Threats Spark Market Panic

Bitcoin (BTC) and the broader crypto market experienced a significant downturn on Tuesday as tensions between Israel and Iran escalated, with the US, under President Trump, adopting a hardline stance. Trump demanded the complete disarmament of Iran’s nuclear program and threatened Iran’s supreme leader, Ayatollah Ali Khamenei. This geopolitical uncertainty sparked panic in the market, leading to a sharp decline in BTC's price.

BTC had reached an intraday high of $108,944 earlier in the week but plunged to a low of $103,395 following Trump's remarks. The flagship cryptocurrency's price dropped over $1,000 after Trump threatened Iran’s supreme leader, claiming that the leader was an easy target but that the US would not take him out at that moment to avoid missile attacks on civilians or American soldiers. Trump also demanded Iran’s unconditional surrender, further escalating the conflict and contributing to the market's bearish sentiment.

In response to the escalating conflict, BTC dipped over $1,000, dropping to a low of $103,395. The market's reaction to the geopolitical tensions highlights the sensitivity of cryptocurrencies to macroeconomic uncertainty and the potential impact of geopolitical events on their prices.

Bitcoin (BTC) has since rebounded to reclaim $105,000, with the price up nearly 1%, trading around $105,235. The flagship cryptocurrency has struggled to regain momentum after dropping from $110,000 last week as market sentiment flipped to bearish. As a result, it dipped to a low of $102,832 by Friday before recovering over the weekend. Analysts believe BTC still risks further downside but must stay above $102,000-$103,000 to remain on track for a potential recovery.

Bitfinex analysts stated in a market report that if Bitcoin can hold above the $102,000 - $103,000 region for a sustained period, it would suggest that the market is absorbing the selling pressure effectively. They added that while some downside risk persists thanks to macroeconomic uncertainty and geopolitical tensions, it presents a potentially risky yet rewarding opportunity for investors.

Some analysts presented a bleaker outlook, believing that current market and geopolitical conditions could push BTC below the psychological $100,000 price level. Some, like analyst Doctor Profit, believe the flagship cryptocurrency could retreat as low as $93,000. Markets were optimistic about BTC testing its all-time high after it surged past $110,000 last week. However, those hopes were dashed after Israel carried out airstrikes on Iran.

Meanwhile, spot Bitcoin ETFs continued to see strong inflows despite market uncertainty. BTC traded in positive territory over the previous weekend, rising nearly 3% and moving to $104,378 on Friday. Price action remained positive over the weekend as the flagship cryptocurrency rose 1.15% on Saturday and registered a marginal decline on Sunday to reclaim $105,000 and settle at $105,784. Bullish sentiment intensified on Monday as BTC surged over 4% to cross the 20-day SMA and $110,000 to settle at $110,251. The price fell to an intraday low of $108,335 on Tuesday but recovered to reclaim $110,000 and settle at $110,253. BTC lost momentum on Wednesday, falling 1.42% and settling at $108,687.

Selling pressure intensified on Thursday as BTC fell nearly 3%, slipping below the 20-day SMA and settling at $105,828. The price plunged to an intraday low of $102,832 on Friday. However, it recovered from this level to register a marginal increase, reclaim $106,000, and settle at $106,106. Price action was mixed over the weekend as BTC fell 0.59% on Saturday before registering a marginal rise on Sunday to settle at $105,562. BTC raced to an intraday high of $108,944 on Monday as it started the week positively. Despite the positive start, it could not stay at this level and settled at $106,806, ultimately registering an increase of 1.18%. Sentiment turned bearish on Tuesday thanks to the deteriorating situation in the Middle East. As a result, BTC fell over 2%, slipping below the 20-day SMA and $105,000 to settle at $104,518, but not before dropping to a low of $103,395. The current session sees the price marginally up as buyers and sellers struggle to establish control.