Bitcoin sinks as Israel escalates Iran standoff with airstrikes

Largest digital asset slid as much as 3% in Singapore to dip below $103,000

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The selloff came after explosions were heard in Tehran, according to local media.
The selloff came after explosions were heard in Tehran, according to local media.

Bitcoin and other cryptocurrencies sank after Israel launched airstrikes on Iran in a major escalation.

The largest digital asset slid as much as 3% on Friday morning in Singapore to dip below $103,000 before paring losses, according to data compiled by Bloomberg. Second-ranked token Ether had at one point shed about 7.6% of its value.

The selloff came after explosions were heard in Tehran, according to local media. Israeli Defense Minister Israel Katz said he's declaring a special state of emergency due to Israel's "preemptive strike against Iran." Israel is anticipating a retaliatory drone and missile attack, Katz said.

"Crypto is reacting negatively to news of Israel strikes in Iran, in line with major risk assets," said Caroline Mauron, co-founder of Orbit Markets, a provider of liquidity for crypto derivatives. "We expect to see technical support around $101,000, but geopolitical news will drive price action from here in the short-term."

Stocks fell along with equity-index futures while investors rushed to the safety of havens such as Treasuries in the immediate aftermath of the strikes. Crude oil jumped more than 9% while gold also rose.

Bitcoin's decline shows that while it has "occasionally traded as a macro hedge, in moments of acute risk like this one, particularly involving kinetic military conflict, liquidity is prioritized over narrative," said Sean McNulty, derivatives trading lead of APAC at digital-asset prime brokerage FalconX Ltd. "Traders raise cash, rotate into dollars, and reduce leveraged or volatile exposure."

Over $1 billion dollars' worth of long positions across all cryptocurrencies were liquidated in the past 24-hours, according to Coinglass data.

Tony Sycamore, market analyst at IG, said in a note that "a further deterioration in risk sentiment" is likely ahead of the weekend.

Bitcoin was trading at $103,540 as of 10:40 a.m. in Singapore on Friday.

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