The crypto market just got hit hard, dropping to $3.12 trillion, while Bitcoin has plunged below the $100,000 mark, marking its lowest level since early May. This recent drop came in response to the escalating Iran-Israel war, with the U.S. stepping in between.
This has led Iran to close the Strait of Hormuz for the first time since 1972, triggering a sharp dip in Bitcoin’s price.
So, what’s the connection between the Strait of Hormuz and a crypto crash? Let’s break it down.
Geopolitical Tension Hits Bitcoin $100k
The most recent reason behind the bitcoin price crash was that Iran’s parliament has approved a move to block the Strait of Hormuz —a vital passage for about 20% to 30% of the world’s oil supply, which has rattled global markets.
While the decision hasn’t been finalized yet, if closed, then the shipments of 20 plus million barrels of oil per day will be affected and will surge the oil price, possibly even hitting $100 per barrel.
A spike in oil typically leads to inflation fears and pushes investors away from risky assets like Bitcoin.
As a result, Bitcoin broke below the $100,000 mark after holding strong for 45 days. This break triggered concern across the crypto space, especially among traders with high-leverage positions.
Chart Patterns Confirm the Fear
According to crypto analyst CryptoKid, Bitcoin is showing clear signs of weakness. On the BTC chart, a “double top” pattern has formed, a bearish signal, along with a drop below key support levels.
Because of this, analysts are now keeping an eye on the next important price zones. If Bitcoin continues falling, the next likely support levels are around $97,600 and $93,100 based on Fibonacci retracement levels.
There’s also growing concern that Bitcoin could fall to $91,960, where a CME gap still exists. If that happens, it might lead to more panic selling and liquidations in the market.
Altcoins in the Danger Zone Too
With the bitcoin price hitting hard, altcoins are also seeing some heat. Meanwhile, altcoins like Solana, Dogecoin, and AVAX are also on thin ice as the price has seen in drop of 10%.
However, the prices are approaching extreme lows—levels not seen since the last bear market. While some see it as a buying opportunity, Crypto Kid advises caution and reducing leverage during uncertain times.
