Bitcoin Falls Below 77K as US Strikes on Iran Unnerve Global Markets

Bitcoin has lost the 78,000 and 77,000 levels in quick succession after the United States launched fresh military strikes on Iranian targets, triggering heavy selling across crypto and stock markets and pushing oil prices sharply higher.

According to U.S. Central Command, American forces began striking Islamic Revolutionary Guard Corps targets in Iran at 12 p.m. ET on Tuesday, citing recent attempted attacks against commercial vessels in the Strait of Hormuz and U.S. military personnel stationed in the region. Bitcoin fell through 78,000 as reports of the operation emerged, then extended its decline below 77,000. At the time of writing, the cryptocurrency traded around 76,762, down from an intraday high near 79,166.

The selling was not confined to Bitcoin. Ethereum moved below 2,400 during the decline, and according to CoinGlass data cited in the original report, roughly 115 million USD in leveraged long positions across the crypto market were liquidated within a single hour. Liquidations occur when an exchange closes a leveraged position after the trader’s collateral can no longer cover mounting losses, and a rapid price decline can force the closure of long positions, adding more sell orders to an already weak market.

A Month-Long Truce Breaks Down

Tuesday’s action ended roughly a month without direct military exchanges between the two countries, according to the Associated Press. Earlier U.S. strikes on Sunday targeted rocket launchers on Larak Island, after which Iran launched missiles toward American sites in Jordan. Jordanian forces intercepted the missiles, while the United Arab Emirates said it stopped an Iranian drone over its waters.

Iranian state media reported explosions across several locations on the country’s southern coast, including Qeshm Island, Bandar Abbas, and Chabahar, with reports cited by Axios also identifying Jask, Konarak, Minab, and Sirik among the areas struck. Qeshm Island and Bandar Abbas sit close to the Strait of Hormuz, the passage through which roughly one-fifth of global oil and liquefied natural gas supplies moved before the current conflict, according to Reuters data previously cited in market coverage.

Following the strikes, Iranian semi-official news agencies Fars and Tasnim reported that Tehran had started launching missiles and drones in response, and an IRGC spokesperson said the United States “will regret its new attacks.” President Donald Trump described the American operation as “large and powerful” and warned that another Iranian response would lead to a “much harder and higher level” of U.S. attack. Iranian President Masoud Pezeshkian had said earlier on Tuesday that Tehran was prepared to return to the ceasefire agreement brokered with Washington in June if the United States followed its terms.

Oil Above 90 Compounds the Pressure

Crude prices accelerated as military activity returned to areas around the strait. Reuters reported that Brent crude settled 4.6 percent higher at 94.65 USD per barrel, while U.S. West Texas Intermediate rose 5.2 percent to 90.22 USD. Oil traders were also monitoring reports that two tankers had been hit while leaving the strait, and Iranian officials have warned that Gulf oil exports could face additional disruption if pressure on Tehran continues.

The market reaction extended well beyond digital assets. U.S. equities declined as investors assessed the effect of higher oil prices, Treasury yields rose as government bonds sold off, and the S&P 500 fell to its lowest level since Aug. 4, according to market data cited in the original report.

Higher energy prices matter directly to crypto investors because a sustained rise in fuel costs can feed into inflation data and influence Federal Reserve policy. Federal Reserve Chair Kevin Warsh has maintained a firm position on inflation and left open the possibility of higher interest rates, and rising Treasury yields increase the appeal of interest-bearing assets while raising financing costs, conditions that have previously weighed on Bitcoin and other assets that do not produce yield.

Where the Price Goes From Here

The decline caps a volatile turn for an asset that had just posted one of its strongest months in years. Bitcoin gained about 23 percent in August, according to market data cited in earlier coverage, before renewed geopolitical and interest-rate concerns weighed on the opening trading sessions of September. Just one day earlier, Bitcoin had held near 78,000 even as earlier exchanges between U.S. and Iranian forces pushed crude above 90 USD per barrel.

Technically, the fall below 77,000 places Bitcoin near the lower end of the range it established after its August rally. The intraday low near 76,483 has put the 76,500 area under active test by sellers, and a sustained break below that region would remove another support level that previously slowed declines. Any recovery would first require Bitcoin to regain 77,000, followed by the former support zone between 78,000 and 79,000.

The precedent is cautionary. In July, a warning of further U.S. strikes coincided with a 500 billion USD stock selloff as crude prices rose and Bitcoin came under pressure. With August inflation data and the Federal Reserve’s September policy decision still ahead, and with Tehran’s response reportedly still active late Tuesday, the immediate path for Bitcoin likely depends less on crypto-specific flows and more on whether the Strait of Hormuz becomes the flashpoint markets fear.