Bitcoin has dropped sharply following reports of Israeli airstrikes on Iran, unsettling traders and stalling hopes of a near-term all-time high.
At approximately 22:50 UTC on Thursday, explosions were reported in Tehran, prompting an immediate reaction from markets.
Within 90 minutes of the strikes, Bitcoin fell 2.8%, sliding from $106,042 to $103,053, before stabilizing at $104,370, according to CoinMarketCap.
This retreat placed the digital asset closer to the psychologically significant $100,000 threshold.
Traders Caught Off Guard by Sudden Drop
The decline triggered significant liquidations in the market.
Data from CoinGlass revealed that $427.84 million worth of long positions were wiped out in the past 24 hours.
The abrupt reversal followed a bullish trend earlier in the week, when Bitcoin had surged to $110,265 — just shy of its May 22 peak of $111,940.
The abrupt geopolitical event disrupted expectations that Bitcoin might retest its all-time high in the short term.
Traders were clearly positioned for upward movement, and the sell-off caught many off guard.
Safe-Haven Shift Benefits Oil and Gold
While Bitcoin retreated, traditional safe-haven assets saw an uptick.
Gold rose 1.44%, and oil jumped 11% over the same period.
Some crypto analysts, however, believe this outperformance may be short-lived.
Bitcoin investor Anthony Pompliano pointed out that similar dynamics occurred last October when Iran launched rockets toward Israel.
Bitcoin initially dropped 3% during that event but ultimately outperformed oil and gold over the following 48 hours.
“This is exactly what happened last time,” Pompliano said.
“Bitcoin ended up outperforming the other two over the first 48 hours in that situation.”
Heightened Tensions Fuel Market Uncertainty
The escalating conflict continues to weigh on market sentiment.
Israeli Prime Minister Benjamin Netanyahu confirmed that the strikes were aimed at Iran’s nuclear program, saying the campaign would persist “for as many days as it takes to remove this threat.”
In retaliation, Iran reportedly launched over 100 drones.
Its supreme leader, Ayatollah Ali Khamenei, issued a stern warning, declaring that Israel “should anticipate a severe punishment.”
U.S. Secretary of State Marco Rubio clarified that the United States had no involvement in the attack.
This leaves markets on edge amid uncertainty over how Iran will escalate its response.
Some Investors See Opportunity in the Fear
Despite the volatility, certain market participants view the current dip as a buying opportunity.
Samson Mow, CEO of Jan3, posted on Thursday that fear in the market should be seen as an entry point.
He directed his message toward GameStop CEO Ryan Cohen, saying, “[Cohen] this is where you buy it when it feels scary. If it dips lower and you feel even more nervous, buy even more.”
GameStop, which recently raised $1.5 billion through convertible notes, used a portion of the proceeds to purchase 4,710 Bitcoin on May 28, valued at $513 million at the time.
As of publication, Bitcoin is trading at $104,370.