Bitcoin Slides Back to $66,500 as Iran War Fears Weigh on Risk Assets

Bitcoin was changing hands at $66,564 as of 18:55UTC on 30 Mar. It had briefly rallied toward $68,000 during the pre-market New York session before giving up most of those gains.

The retreat mirrors a broader pullback across risk assets. Investors are weighing the possibility of a prolonged Middle East conflict and its potential impact on inflation and global growth.

In a social media post, US President Donald Trump threatened to destroy Iran's power plants, oil wells, Kharg Island and possibly, its desalination plants if a deal was not reached soon and the Strait of Hormuz reopened.

The statement landed alongside reports that hundreds of US special operations forces, including Army Rangers and Navy SEALs, had arrived in the Middle East to join US troops already in the region.

Bitcoin's performance reflects a broader deterioration in risk sentiment. WTI crude oil rose to as much as $109.46 a barrel on 30 Mar, on track for a record monthly gain of more than 50%. Equity markets offered little comfort, with the S&P500 declining 0.9% on the day.

Sharp liquidations

With surging energy prices adding to pressure on inflation expectations, the conflict's disruption to Middle East energy supply has left investors' risk appetite fragile. This keeps Bitcoin exposed to sharp swings on every new development from the region.

The cryptocurrency experienced a sharp move around 22:45UTC on 29 Mar, triggering heavy long liquidations.

$117mn in long positions were liquidated between 22:00UTC and 22:45UTC, compared with just $7.7mn in shorts, according to Coinglass data. The move coincided with a sudden surge in Polymarket odds on the US entering Iran by 31 Mar, rising from 8.2% at 20:00UTC to 28% by 21:50UTC before retreating to 12.1% by 22:35UTC.

The 5-minute Bitcoin chart shows a sharp dip to $64,955 at 22:45UTC and a subsequent recovery. This illustrates the speed and scale of the liquidation event. By 00:15UTC on 30 Mar, Bitcoin had returned to the pre-dip level of around $66,200 and continued an upward trajectory during the Asian session. By 11:00UTC, BTC was changing hands for around $67,500 - a 4% gain in a little over twelve hours.

Such episodes highlight how quickly leveraged positions can unwind when sentiment shifts. Prediction markets, which allow real-time betting on geopolitical outcomes, have become a visible barometer of risk perception.

The timing adds to a series of notable coincidences observed during the ongoing US-Iran tensions, where geopolitical headlines have repeatedly intersected with sharp moves on betting sites such as Polymarket and Kalshi. While the two events of 29 Mar occurred at the same time, no direct causal link has been established.