Geopolitics in Control: Crypto Under Pressure Amid War Escalation Concerns

Currently, geopolitics is shaping market trends, with cryptocurrencies feeling the pressure amid fears of war escalation.
The conflict in the Middle East has become a major factor influencing global markets, causing shifts between risk-on and risk-off sentiment. Even brief moments of calm do not alter the overall negative impact, as investors tend to shift toward safer assets.
Since the conflict began, the US dollar has strengthened, and global stocks have struggled. Bitcoin largely remains flat, partly because the crypto market has already fallen more than 50% from its peak before the war started on February 28.
The main concern now is the possibility of a US ground invasion, which is putting downward pressure on market confidence.
The US launched “Operation Epic Fury” on February 28, hoping for a quick resolution. However, the situation has continued for over a month, evolving from airstrikes into a more complex conflict. This includes attacks on energy infrastructure and the closure of the Strait of Hormuz. Meanwhile, the US has significantly increased its military presence, deploying over 50,000 troops, including Marines and special forces, indicating a potential shift toward ground operations.
If a ground invasion occurs, it is most likely to harm Bitcoin and the broader crypto market even more.
First, it could push global inflation higher. Damage to oil supplies and energy infrastructure tends to raise energy prices, especially in countries heavily dependent on Gulf oil, such as India and China. Meanwhile, central banks are still fighting inflation, and the Federal Reserve is expected to keep interest rates high. Higher interest rates generally reduce liquidity, which usually harms the crypto markets.
Second, investors tend to avoid risky assets during times of uncertainty. In war or crises, money typically flows out of volatile assets like crypto and into safer options such as cash, bonds, or the US dollar. Bitcoin is still considered a risk asset rather than a safe haven.
Third, mining operations may experience disruptions. Iran relies on crypto mining, and damage to electrical infrastructure during the conflict could cut mining activity, lowering Bitcoin’s hash rate and putting downward pressure on its price.
Fourth, falling prices could trigger broader market issues. Significant losses might push some companies into financial trouble or bankruptcy. Since the crypto market is highly interconnected, problems in one area can quickly spread and cause a downward spiral.
However, a ground invasion is not certain to happen.
The US faces political challenges ahead of the midterm elections in 2026. Prolonged conflict could lead to more casualties, higher energy prices, and voter dissatisfaction.
Public resistance is also increasing. Large protests have occurred across the US, and surveys show most Americans disapprove of how the situation is being handled. This limits the escalation that could occur.
Economic factors add further constraints. The US national debt has exceeded $39 trillion, and an invasion would increase spending even more. Rising bond yields reflect concerns about fiscal health, which could complicate the sustainability of a prolonged conflict.
From a technical perspective, Bitcoin still shows a bearish trend. The current pattern resembles the 2021–2022 cycle, when Bitcoin fell more than 70% after reaching its peak.
In this cycle, Bitcoin hit an all-time high of $126,000 in October 2025 and has since declined about 46%. Bitcoin also fell below the 200-week moving average, an important long-term indicator.
Bitcoin is currently trading between support at $60,000 and resistance around $78,500. This sideways movement is common during bearish market phases.
If history repeats, Bitcoin could drop up to 77% from its peak, which would place the bottom around $28,300 by mid-October. After reaching this point, the market may need several months to stabilize before a new upward trend begins.
Overall, macroeconomic factors and geopolitical tensions are driving the market. Until the war subsides or ends, cryptocurrencies are likely to continue facing downward pressure.