Investors across asset classes find themselves holding their breath as they await a critical 8:00 p.m. ET deadline set by the United States regarding the ongoing conflict in the Strait of Hormuz. This geopolitical flashpoint casts a long shadow over trading sessions, creating an environment where relief rallies in digital assets clash with the looming threat of military escalation. The market mood remains fragile, with traders balancing the hope for a diplomatic resolution against the very real possibility of a devastating strike on Iranian infrastructure that could reshape global energy supplies and risk appetite for months to come.
In the cryptocurrency sector, the narrative centres on a failed attempt to sustain momentum. Bitcoin briefly reclaimed the psychologically significant US$70,000 level on Monday, fuelled by a wave of short liquidations totalling over US$145 million as bearish traders scrambled to exit their positions. That optimism proved short-lived. By Tuesday morning, the leading digital asset had retreated to approximately US$68,765, marking a 0.7 per cent decline as sellers stepped in to test support levels following the rejection at the US$70,000 mark. This pullback occurs despite a glimmer of institutional confidence, evidenced by US-listed spot Bitcoin ETFs recording roughly US$22.3 million in net inflows last week. These inflows suggest that while short-term traders remain skittish, larger institutional players are beginning to stabilise their positions and view current levels as an accumulation opportunity.
The technical picture for Bitcoin remains mixed, offering both hope and caution. Indicators such as the Weekly MACD are hinting at a potential bullish cross, a signal that has historically preceded significant upward moves in previous cycles. Immediate overhead resistance remains formidable, sitting firmly between US$73,777 and US$75,000. Breaking through this zone will require substantial buying pressure that the market currently lacks due to the overarching fear of geopolitical instability. This anxiety is quantified in the Fear and Greed Index, which sits at 26, firmly in the Extreme Fear territory. This low sentiment score reflects deep uncertainty regarding how a potential conflict in the Middle East might impact global liquidity and the risk-on nature of crypto assets. Furthermore, the regulatory landscape adds another layer of complexity, with a newly passed provision in the US Senate now mandating that crypto firms collect more user information to combat terrorism financing. This move introduces a long-term compliance burden that could dampen enthusiasm among privacy-focused investors.
While Bitcoin struggles to hold its ground, the broader altcoin market displays a surprising degree of resilience and divergence. Ethereum, the second-largest cryptocurrency, trades near US$2,126, showing a marginal 0.2 per cent decline as it consolidates within the US$2,100 range. This stability suggests that traders are waiting for a clearer directional signal from Bitcoin before committing capital to the ecosystem. In contrast, other major assets are posting notable gains. XRP has surged 3.8 per cent to reach US$1.34, rebounding strongly from what technical analysts identify as a critical Fibonacci support floor. Similarly, Solana is outperforming the market leaders, posting a 3.1 per cent gain and pushing its price to US$82.09. This recovery for Solana marks a potential turning point after a multi-month bearish trend, indicating that capital may be rotating into high-performance layer-one blockchains that offer faster transaction speeds and lower costs during times of network congestion.
The traditional equity markets tell a different story, one of stubborn optimism in the face of rising energy costs. Major US indices extended their winning streaks, with the S&P 500 climbing 0.44 per cent to 6,611.83. This marks the index’s fourth consecutive session of gains, demonstrating a remarkable ability to look past immediate geopolitical threats. The technology-heavy Nasdaq Composite led the charge with a 0.54 per cent increase to 21,996.34, driven by robust gains in the tech sector. The Dow Jones Industrial Average also participated in the rally, adding 0.36 per cent to close at 46,669.88, reflecting moderate but steady gains across industrial and blue-chip stocks. This resilience in equities stands in stark contrast to the nervousness in the crypto market, suggesting that traditional investors may be pricing in a resolution to the Hormuz crisis or are simply too entrenched in the current momentum to exit positions prematurely.
Global markets are also showing signs of recovery, with Asian indices posting strong performances. The Hang Seng Index in Hong Kong rebounded significantly, gaining 2.00 per cent to 25,294.00, a move attributed to easing fears over regional stability. Similarly, India’s Nifty 50 index climbed 1.12 per cent to 22,968.25, finding strong support near the 23,000 level. These gains in Asian markets provide a supportive backdrop for US trading, although the underlying tension regarding energy supplies remains a potent risk factor. The energy sector itself presents a paradox for investors. Crude oil prices have surged to alarming levels, with Brent crude hovering near US$110 per barrel and West Texas Intermediate reaching US$113 per barrel. Traders are actively pricing in what some analysts describe as the worst oil crisis in history, fearing that a closure of the Strait of Hormuz would choke off a significant portion of the world’s seaborne oil trade.
Despite the surge in oil prices and geopolitical tension, gold has failed to act as a reliable safe haven in this specific conflict. The precious metal has fallen approximately 12 per cent since the conflict began in late February and currently trades near US$4,660 per ounce. This decline is largely driven by rising yields and a strengthening US dollar, which reduces the appeal of non-yielding assets like gold. The US 10-Year Treasury yield held steady at 4.34 per cent, with bond traders largely expecting the Federal Reserve to maintain current interest rates through the end of the year to combat the inflationary pressures stemming from the energy shock.
Investors are clearly worried that sustained high energy prices will feed into broader inflation, eroding consumer purchasing power and hurting the growth prospects of retail and leisure companies. The market remains in a state of suspended animation. A failure to reach a deal could trigger the feared Power Plant Day strike, likely causing a wave of panic selling across crypto and equities as investors flee to safety. A diplomatic breakthrough could unleash the pent-up buying pressure visible in the technical indicators, potentially sending Bitcoin back toward its resistance levels and fueling the next leg of the equity rally. Until then, volatility remains the only certainty.
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.
