Bitcoin Plummets Below $104,000 Amid Escalating Israel-Iran Tensions

On June 12, the prices of Bitcoin and Ethereum took a hit following reports of Israeli airstrikes on Iran. The escalation of conflict prompted a withdrawal of investors from riskier assets.

In the past 24 hours, Bitcoin dropped by 3.6%, falling below the $104,000 mark and trading at $103,970 at the time of writing.

Ethereum experienced a more significant decline of 9.2%, reaching $2,503.

This market downturn was triggered by reports from the Associated Press about explosions in Tehran. An unnamed Israeli military official confirmed that the strikes targeted Iran’s nuclear and military infrastructure.

According to CNN, Israeli Defense Minister Israel Katz declared a state of emergency in the country, indicating that “a missile and drone attack is anticipated in the near future” as a retaliatory measure.

Amid these developments, oil prices surged by more than 7%. The benchmark U.S. crude, West Texas Intermediate, rose to $71.94 per barrel, while the international standard Brent climbed to $73.16 per barrel.

Nick Rack from LVRG Research stated in a comment to The Block that the pressure on cryptocurrencies is a result of investors seeking safer assets.

Presto Research analyst Min Jung also linked the sell-off in the digital asset market to the strikes on Iran, noting that oil prices surpassed $70 for the first time in three months.

Despite the short-term volatility, some prominent figures remain optimistic. Galaxy Digital CEO Mike Novogratz believes that Bitcoin could increase tenfold to reach $1 million.

He suggests that, over time, Bitcoin will replace gold as the primary store of value, which he anticipates will drive the next bull run.

Novogratz highlighted a growing interest in digital assets among the younger generation, contrasting it with the declining interest in precious metals. He emphasized that for Bitcoin to match the market capitalization of gold, it needs to grow ten times.

He identified «macro acceptance» of the cryptocurrency as a key growth factor, stating that this process has entered an irreversible phase.

«Corporate treasuries, sovereign funds, and retail investors are now putting their money into this asset. There are simpler ways to buy it. Bitcoin’s acceptance as a macro asset for value retention is akin to a snowball rolling down a hill,” added the head of Galaxy Digital.

From a technical perspective, the current correction in Bitcoin seems justified. The asset surged about 10% between June 6 and June 10, so a 3.5% decline is considered normal. CryptoQuant’s author Axel Adler Jr. explained that the market is experiencing a «soft turning point.»

According to the analyst, the price drop is likely linked to profit-taking at resistance levels, confirmed by aggressive short-selling volumes.

Adler Jr. elaborated:

«This is a classic ‘soft turning point’ following an uptrend: as long as the funding rate remains positive and open interest declines, a short-term correction or consolidation below $108,000 should be expected.”

On June 11, Bitcoin’s price corrected to $107,369, while Ethereum dropped to $2,746. This decline followed the release of U.S. inflation data that exceeded expectations, triggering profit-taking based on the “buy the rumor, sell the news” principle, as noted by Decrypt.

The initial momentum that drove Bitcoin’s price above $110,000 and Ethereum close to $2,880 quickly faded. The Fear and Greed Index decreased from 72 to 71 points but had dropped to 61 at the time of writing.

Technical analysis indicates that Bitcoin remains within an upward channel established in mid-May, suggesting that the current pullback is a correction rather than a trend reversal.

The asset is confidently trading above the 50-day exponential moving average (EMA50), confirming buyer strength.

Key indicators offer a cautious outlook:

The long-term trend remains bullish as EMA50 is above EMA200. The critical support zone lies at the lower boundary of the upward channel around $103,000. Maintaining this level will preserve the potential for movement towards historical highs.

Ethereum’s chart appears more optimistic than Bitcoin’s. The asset broke above the upper limit of its consolidation channel, where it had been trading between $2,400 and $2,700. The price rebounded successfully from support several times, boosting traders’ confidence.

Technical indicators for ETH show greater optimism:

The support zone in the range of $2,400-$2,500 provides a good entry point. A breakthrough of the resistance level at $2,850 could pave the way for targets at $3,000 and $3,300.

Recall that on June 9, the price of the first cryptocurrency exceeded $107,000 against the backdrop of capital outflows from spot ETFs and news of unrest in the U.S.