Crypto crash resumes as odds of US attacking Iran jumps

The recent crypto crash resumed today, February 27, as investors booked profits and as geopolitical risks in the Middle East escalated.

Bitcoin (BTC) price retreated below $66,000, while the market of all tokens retreated by 2.85% in the last 24 hours to over $2.28 trillion. Pippin token dropped by 26% in the last 24 hours, while Kaspa, Zcash, and Lighter retreated by over 6%.

On the other hand, some top tokens like Decred, LayerZero, Arbitrum, and Internet Computer tokens jumped by over 4% in the same period.

Crypto crash resumes as odds of US attacking Iran jumps

The ongoing crypto crash is happening because of the rising geopolitical tensions between the United States and Iran.

In a statement, Ambassador Mike Huckabee told staff at the US embassy in Jerusalem to leave their offices and country, raising the possibility that the US will attack Iran in the coming days. The evacuation order is only for non-essential staff and the embassy will remain open.

This announcement came a few days after the US ordered its non-essential staff in Lebanon to leave the country. 

Traders on Polymarket believe that an attack is coming soon. Odds of an attack happening in March rose to 72%, while before March rose to 80%.

A new war in the Middle East will have an impact on Bitcoin and other markets because Iran has warned that it will retaliate by attacking US bases in the Middle East and by closing the Strait of Hormuz. 

Such a move will lead to higher inflation, which will make it hard for the Federal Reserve to cut interest rates in the coming meetings. Also, Bitcoin is no longer a safe-haven asset as analysts were expecting.

Profit-taking and stock market crash 

The ongoing crypto crash is happening because of the profit-taking among investors. 

Bitcoin jumped from $63,000 earlier this week and then moved to $68,000, while other tokens like Pippin, Pepe, and Kaspa soared by double digits. As such, the retreat confirms that the rebound was a dead-cat bounce.

The crypto market crash also coincided with the ongoing stock market dive. For example, the Dow Jones Index retreated by over 500 points, while the S&P 500 and Nasdaq 100 indices fell by over 1%.

The stock market retreat was mostly because of the ongoing concerns about the booming private credit industry, where some companies like Blue Owl and Apollo.

Additionally, the crypto crash also happened after the US published a strong Producer Price Index, which rose by 0.5% in January, higher than market participants were expecting.