BTC recovers to $67.4K after dipping on Middle East escalation

• Bitcoin hit a low of $65,112 following a major escalation in the Middle East before recovering to $67,402.
• The conflict has expanded as Houthi forces joined the war, while Iran launched direct attacks on regional industrial sites.
• This price drop breaks a five-week technical trend of establishing higher market floors during geopolitical crises.

Geopolitical Escalation and Market Volatility

The conflict in the Middle East has entered a more complex phase, directly impacting global markets. Houthi forces backed by Iran have officially joined the conflict, creating a new front. Simultaneously, the Wall Street Journal has reported that Donald Trump is considering a potential military operation to seize uranium from Iran, though no final decisions have been reached.

Economic damage is spreading beyond the energy sector. Iran recently targeted two aluminum production facilities, causing the price of the metal to surge by 6%. Brent crude oil also rose 2.5% to approximately $115 per barrel, marking a year-to-date increase of nearly 90%. These developments suggest that the war's economic impact is now infiltrating industrial supply chains, complicating the Federal Reserve's ability to manage inflation and potentially delaying future interest rate cuts.

Cryptocurrency Market Response

Bitcoin experienced significant volatility, dipping to $65,112 early Monday morning, its lowest point since the market crash in February. However, as Asian markets opened, the price stabilized near $67,402. While Bitcoin is down 1% on the week, other major assets showed signs of recovery:

• Ethereum (ETH) rose 2% to $2,044.
• Solana (SOL) climbed 0.9% to $83.48.
• XRP added 1.4% to reach $1.35.
• Tron (TRX) emerged as a top performer, rising 2.6% in a day and 4.6% over the week.

Technical Analysis and Global Equity Slump

From a technical perspective, the $65,112 level is critical. Since the war began on February 28, Bitcoin had established a pattern of higher lows, moving from $64,000 to $66,000, and eventually reaching $70,596. Monday’s dip below the $66,000 mark represents the first time the market floor has shifted downward rather than upward during an escalation.

Equity markets also reacted sharply to the news. In Asia, South Korea's benchmark index fell 3.2% due to a selloff in technology stocks, while Japan's Nikkei dropped 3.4%. Although S&P 500 futures managed to trade roughly flat after the initial shock, the broadening inflationary pressure from oil and industrial commodities remains a primary concern for global investors.