Bitcoin Slides as US and Israel Launch Strikes on Iran

Bitcoin and other cryptocurrencies experienced a sharp decline on Saturday, February 28, 2026, following joint military strikes by the United States and Israel against targets in Iran. The attacks triggered a risk-off sentiment in the market, leading to significant liquidations and a temporary dip in prices.

Market Reaction: A Rapid Sell-Off

Bitcoin briefly fell from around $65,500 to $63,000 within an hour of the news breaking, according to CoinDesk. Ethereum too saw a decline, dropping to approximately $1,850. The total cryptocurrency market capitalization lost roughly $75 billion during this period, impacting traders before traditional markets opened. WIONews reported that approximately $128 billion was wiped from the crypto market.

Liquidations Surge

The volatility spurred a wave of liquidations across the crypto derivatives market. Over 154,000 traders were liquidated in the past 24 hours, totaling $522 million, with long positions accounting for $449 million of the liquidations. The largest single liquidation was a $11.17 million Bitcoin position on Aster, as reported by CoinPedia.

Futures Volume Outpaces Spot Trading

Data from CoinGlass revealed that Bitcoin futures volume reached $76.27 billion in the last 24 hours, significantly exceeding the $7.62 billion in spot volume. This suggests the sell-off was largely driven by the forced closure of leveraged positions rather than organic selling pressure.

Historical Precedent: Crashes Followed by Rebounds

Previous instances of conflict involving Iran and Israel have historically been followed by rebounds in the Bitcoin price. In June 2025, following an Israeli strike on Iranian nuclear facilities, Bitcoin dropped but subsequently climbed to latest all-time highs by October. A similar pattern occurred in April 2024 when Iran launched missiles at Israel, with Bitcoin recovering months later.

Current Market Conditions: A Different Landscape

However, the current market conditions differ from previous episodes. Bitcoin is down nearly 50% from its October 2025 peak of $126,000, and the Fear and Greed Index currently sits at 14, indicating “extreme fear.” US spot Bitcoin ETFs have switched to net selling in February 2026, reversing the net buying trend observed in the previous year.

Derivatives Market Signals Caution

On Deribit, the $60,000 put option holds the largest open interest, with over 5,200 BTC, closely followed by the $55,000 put option at 4,657 BTC. Put volume has slightly exceeded call volume in the last 24 hours (50.85% vs 49.15%), indicating a bearish sentiment among larger players.

Accumulation Signal Amidst Panic

Despite the overall downturn, exchange netflows show approximately 522 BTC leaving platforms, suggesting some accumulation is occurring even as retail investors panic. This indicates that some investors are taking advantage of the price drop to buy Bitcoin.

Key Levels to Watch

The key support level to watch is $63,100, where a descending channel support line is located. A break below this level could open the door to $60,000. Conversely, $73,000 to $74,000 remains a significant resistance area.

FAQs

• Why did Bitcoin crash after the US–Israel strike on Iran? Bitcoin fell as geopolitical shock triggered mass liquidations. Leveraged long positions were force-closed, accelerating the drop.
• Is this Bitcoin dip similar to previous Iran-related crashes? Past Iran-linked shocks caused sharp BTC drops but were followed by strong rebounds months later, though conditions differ now.
• Are institutions selling Bitcoin right now? Yes. US spot Bitcoin ETFs turned net sellers in February 2026, signaling reduced institutional demand during this downturn.