Bitcoin price stays below $78K as Iran tensions shake crypto markets

Bitcoin (BTC) has remained under pressure below $78,000 after renewed US military action near the Strait of Hormuz and persistent Federal Reserve uncertainty pushed traders out of risk assets while institutional Bitcoin products recorded another wave of heavy outflows.

According to CoinGecko data, Bitcoin briefly dropped below $77,000 on Tuesday after overnight US strikes targeted missile launch sites and mine-laying vessels in southern Iran. 

US Central Command has described the operation as a defensive action meant to protect military personnel near the Strait of Hormuz, while Iranian officials reportedly condemned the strikes and warned of retaliation.

Markets reacted quickly as investors moved toward traditional safe-haven assets amid fears that the conflict could expand beyond isolated military operations. 

Although peace discussions reportedly continued in Qatar, traders pulled back from aggressive crypto positioning as uncertainty returned to global markets.

At the same time, pressure from the macroeconomic side has continued to weigh on sentiment. 

Persistent inflation data and recent comments from Federal Reserve officials have kept expectations centered around a prolonged high-interest-rate environment. 

Analysts said higher Treasury yields continue to reduce demand for speculative assets such as Bitcoin, especially while the timing of potential rate cuts remains unclear.

Bitfinex analysts said the market risks remain trapped between $72,000 and $82,000 unless stronger institutional demand returns. 

According to the firm, Bitcoin has spent several sessions below the Short-Term Holder Realized Price near $78,600, leaving many recent buyers at a loss and increasing the likelihood that rallies toward breakeven levels could attract selling.

Meanwhile, institutional fund flows have also weakened.

CoinShares reported that global crypto exchange-traded products recorded $1.5 billion in outflows, while Bitcoin-focused investment products posted their largest weekly redemptions of 2026. 

Analysts said the withdrawal of institutional liquidity has left the market more vulnerable to sudden downside moves during periods of geopolitical stress.

Glassnode’s latest weekly report showed Bitcoin falling from around $79,000 to nearly $74,000 last week before recovering toward the $77,000 region. 

The firm said spot trading volume declined 10% during the move, while price momentum weakened 21.7%.

Even so, Glassnode noted that funding payments tied to long positions jumped 135.4%, showing traders continued adding bullish derivatives exposure despite reduced market activity.

Elsewhere, Bitfinex analysts said margin long positions on the exchange climbed to 82,681 BTC last week, the highest level since November 2023. 

The firm said leveraged positioning has risen 88% from the lows recorded in July 2025, a setup that previously appeared during extended market drawdowns.

Bitcoin price analysis

On the daily chart, Bitcoin continues trading between its 20-day and 50-day exponential moving averages after failing to reclaim resistance near the 200-day EMA around $81,400.

Recent candles show buyers defending the $76,800 region repeatedly, while rallies toward $79,000 have struggled to hold. 

Volume has also remained relatively muted compared to the heavy activity recorded during February’s sharp selloff, which suggests traders are still waiting for stronger macro direction before committing to larger positions.

The RSI on the daily timeframe currently sits near 48, close to neutral territory after pulling back from overbought conditions earlier this month. 

Momentum has weakened over the past two weeks, but the indicator has not yet entered oversold territory, leaving room for another move in either direction.

From a structural standpoint, the chart still shows Bitcoin holding above the key $74,000 support area highlighted by trader VeLLa Crypto.

According to the analyst, a break below that level would weaken the medium-term bullish setup and place sellers back in control.

While short-term conditions remain unstable, deeper on-chain supply data has stayed comparatively firm. 

Bitfinex analysts said exchange reserves continue hovering near a seven-year low of 2.21 million BTC, while long-term holder supply remains around 14.43 million BTC. 

Those metrics do not currently show the type of aggressive distribution usually associated with prolonged bear markets, the firm noted.

Analysts eye $220k target for Bitcoin

Looking further ahead, market watchers were also keeping an eye on a multi-year cup-and-handle formation on Bitcoin’s weekly chart.

According to fellow analyst Crypto Tice, Bitcoin has already completed the handle portion of the pattern after successfully retesting the $65,000 to $74,000 neckline region.

According to the analyst, the setup carries a minimum upside target of $220,000 if the breakout structure remains intact.

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