As U.S. forces targeted Iranian locations following attacks on naval vessels in the Strait of Hormuz, Bitcoin experienced a decline. On Friday during Asian hours, BTC was valued at $79,614, down by 1.6% over 24 hours but still up 3.3% for the week after reaching its highest point since late January at $81,500 on Wednesday.
Ether saw a 2% decrease to $2,278, while Dogecoin dropped 3.8% to $0.1063. XRP fell by 1.7% to $1.38, and BNB declined 0.7% to $638. Conversely, Solana and TRON remained in green territory at $88.14 and $0.3474 respectively. Among major cryptocurrencies, only Dogecoin is down over the past week.
The geopolitical tensions arose after U.S. forces retaliated against Iranian targets following attacks on American naval destroyers. President Donald Trump referred to the strike as a “love tap” in an interview with ABC News, stating that the ceasefire remains “in effect,” and warned of stronger actions if Iran doesn’t reach a deal soon. This situation led Brent crude prices to rise by 1.2% to approximately $101 per barrel, although oil is still down over 6% this week amidst ongoing U.S.-Iran de-escalation efforts.
Equity markets also experienced a brief pause. The MSCI All Country World Index dipped by 0.3%, and Asian shares dropped 1.2% from a record closing high, though they are on course for a fifth consecutive week of gains. Wall Street futures indicated a 0.2% increase in early trading, suggesting the pullback was profit-taking rather than signaling a structural reversal.
Bitcoin’s funding rates have remained negative for 67 straight days—the longest such stretch in a decade according to K33 Research. These rates involve periodic payments between traders holding long and short futures positions, with negative funding indicating shorts are paying longs to maintain their open positions.
A market where shorts have been consistently paying for over two months while the price continues to rise sets up an ideal scenario for a short squeeze, potentially triggering a rapid rally if prices suddenly move upwards.
Alex Kuptsikevich, FxPro’s chief market analyst, stated in a report that Bitcoin’s current pause is not indicative of buyer exhaustion. He noted that the daily RSI entered overbought territory above 70, with previous occurrences in August, October, and January followed by sharp selloffs. “It is logical for market participants to take a breather to assess the situation and gather strength,” he added.
The options market remains cautious. QCP Capital observed that monthly implied volatility is around 41% and there’s ongoing demand for put options, indicating traders are hedging their downside risk while purchasing Bitcoin.
XWIN Japan identified $93,000 as a medium-term target based on closing the CME futures gap but warned the move may not be linear and could see an initial decline. Currently, two pressures compete: the potential of a short squeeze if Bitcoin surpasses $83,200 due to extreme negative funding rates, and possible retests of lower price ranges driven by geopolitical news and RSI overbought conditions.