Geopolitical Tensions Undermine Crypto Risk Appetite

 Key Takeaways:

*Bitcoin fell sharply below $100K as U.S.-Iran tensions and risk-off sentiment pressured speculative assets.

*Institutional flows paused, and macro uncertainty tied to oil supply risks dampened crypto’s inflation-hedge narrative.

Market Summary:

Bitcoin extended its losses this week as heightened geopolitical tensions in the Middle East, particularly between the U.S. and Iran, drove a broader retreat from risk assets. Typically viewed as a speculative high-beta asset, Bitcoin struggled to attract safe-haven flows despite market volatility, in contrast to more traditional refuges like gold or the U.S. dollar. The lack of support underscores a shift in investor perception—positioning Bitcoin more closely with tech-like risk exposure rather than as a defensive hedge.

A major factor contributing to the downturn was the sudden escalation in military activity, with U.S. strikes on Iranian nuclear facilities fueling fears of prolonged regional instability. This coincided with a sharp reversal in ETF inflows, signaling institutional hesitation amid the uncertainty. Additionally, Iran’s threat to close the Strait of Hormuz raised inflationary risks via potential oil supply shocks, which could pressure the Fed to keep rates higher for longer—a scenario historically unfavorable for crypto assets. As macro headwinds mount, Bitcoin appears caught between geopolitical anxiety and monetary policy uncertainty.

Still, select investors saw the dip as an accumulation opportunity. Ethereum whales added significant positions, and Bitcoin derivatives markets retained sizable open interest, hinting at possible rebound expectations. But near-term price action is likely to remain volatile, a deeper escalation in the Middle East or hawkish Fed repricing could see Bitcoin extend toward bearish technical targets.

Technical Analysis 

BTC, H4

Bitcoin slumped nearly 5% over the weekend, breaching key support as bearish momentum accelerated, with price now consolidating within a narrow fair value gap (FVG) between $100,400 and $102,150 following the sharp decline. This follows an impulsive selloff that pierced through the key structural support at $104,800, invalidating the prior ascending wedge formation. Price briefly dipped to a session low near $97,632 before rebounding, though the bounce remains technically fragile.

The fair value gap now under test represents a potential supply zone, with early signs of rejection introducing downside risk. Despite the recovery, Bitcoin continues to trade below both the FVG ceiling and the broken trendline support, both of which now act as overhead resistance. Until a decisive reclaim of the $104,800 level is seen, upside prospects appear capped within a bearish continuation context.

Momentum indicators reinforce this cautious outlook. The Relative Strength Index (RSI) prints at 39, hovering in bearish territory and failing to produce a sustained recovery above the neutral 50 level. The MACD histogram shows diminishing bearish momentum, but the MACD line remains well below the signal line, highlighting lingering downward pressure. Together, these indicators point to a fragile bullish attempt amid a broader corrective phase.

Resistance Levels: 104,800.00, 111,750.00

Support Levels: 97,600.00, 91,800.00