Bitcoin (BTC) Plunges to $77K as Iran-US Tensions Escalate and Oil Soars Above $90

Key Takeaways

• BTC declined more than 2% to reach $77,161 following Iran’s ballistic missile launches targeting US military installations in response to American strikes on Larak Island
• Brent crude oil prices surged over 2%, breaking above the $90 per barrel threshold
• US 10-year Treasury yields climbed to 4.76%, marking the highest level recorded since January 2025
• Open interest in Bitcoin futures across CME, Binance, and Hyperliquid increased during recent trading hours despite downward price movement
• According to Polymarket predictions, there’s a 68% chance BTC will hit $85,000 by the end of 2026

Bitcoin experienced a significant downturn on Monday as escalating military confrontation between Washington and Tehran sent shockwaves through global markets. The cryptocurrency declined over 2% to touch $77,161 before staging a modest rebound to approximately $77,813.

The market turbulence followed American military operations that targeted two Iranian Revolutionary Guard Corps missile launchers positioned on Larak Island within the Strait of Hormuz. Tehran’s military responded by firing ballistic missiles toward several US military installations throughout the Middle Eastern region. According to Fox News coverage, defensive systems successfully intercepted nearly every incoming projectile, with no significant casualties or infrastructure damage reported.

US Central Command (CENTCOM) countered Iran’s characterization of the American operation as unprovoked aggression, stating that military personnel executed “limited, precise action” targeting minelaying activities that represented an “imminent threat” to maritime security.

Energy commodity markets responded immediately to the escalation. Brent crude futures advanced more than 2% to trade above the $90 per barrel mark, while West Texas Intermediate crude jumped past $85.50. Goldman Sachs analysts had previously observed that petroleum shipments through the Strait of Hormuz had rebounded to approximately two-thirds of typical capacity.

Bitcoin had momentarily climbed above the $79,000 threshold on positive developments earlier in the session, but Iran’s retaliatory action reversed those gains. Daily trading volume increased by 50% over the previous 24-hour period, indicating intensified market participation.

Treasury Market Volatility Creates Additional Headwinds

Compounding the geopolitical uncertainty, US government bond markets contributed additional downward pressure. The benchmark 10-year Treasury note yield advanced to 4.76%, representing its peak level since January 2025. Meanwhile, the 30-year bond yield touched 5.269%, sitting merely six basis points below its highest reading since January 2007.

Treasury Secretary Scott Bessent informed CNBC that his department had not yet implemented measures to stabilize long-duration bond prices. Although the Treasury Department announced intentions to expand debt buyback operations to $4 billion starting in September—double the previous amount—yields continued their upward trajectory regardless.

Prominent investor Ray Dalio publicly advocated for reducing bond exposure while increasing gold holdings, suggesting investors maintain “a bit of Bitcoin” as protection against a possible US sovereign debt crisis.

The US dollar index strengthened to approximately 99.6, creating additional challenges for cryptocurrency valuations. American equity markets also declined, with both the S&P 500 and Nasdaq Composite falling roughly 0.4%.

Technical Indicators Point to Potential Weakness

Market analyst Rekt Capital identified a hidden bearish divergence pattern in Bitcoin’s daily Relative Strength Index, cautioning that if the RSI continues forming lower peaks, it may indicate “mounting weakness” in the cryptocurrency. Bitcoin’s daily RSI registered 70.7 on Monday, remaining within overbought parameters.

Another analyst, CryptoXLarge, noted on X that Bitcoin has historically never finished September with gains immediately following a positive August performance, describing this pattern as a “historical extreme” that warrants attention as the new month commences.

Bitcoin’s 50-week exponential moving average rested at $77,269, a threshold market analysts have identified as critical support. Futures open interest for BTC increased 0.65% to reach $53.88 billion during the final trading hour, with derivatives markets showing evidence of fresh buying activity.

Spot Bitcoin exchange-traded funds in the United States registered net inflows totaling $217 million on August 31, with BlackRock’s IBIT product leading the charge with approximately $206 million in new capital.