Bitcoin’s early March rally has reversed, with the price falling below $66,000, its lowest level in weeks amid geopolitical tensions and a weak U.S. market.
Cryptocurrency and Wall Street diverge from global indexes
After starting with a bullish surge in March, Bitcoin now appears destined to return to its opening price levels. The cryptocurrency’s all-time high fell below its psychological low of $66,000 on Friday, hitting a multi-week low of $65,505. The move suggests that the resilience of the “war hedge” that characterized the early days of the U.S.-Israel-Iran conflict has finally buckled under the weight of lingering uncertainty.
The decline was not limited to Bitcoin. Bitcoin’s 4.5% intraday decline wiped nearly $10 billion from its market cap, acting as a major weight for the broader digital economy and bringing total crypto assets down to $2.36 trillion. Deribit’s massive $14 billion option expiry initially provided downward momentum, but the main driver is its close correlation with U.S. stocks, which are still bleeding.
Markets in Asia and Europe remained largely flat, but Wall Street was a sea of red. The Nasdaq fell more than 400 points, or nearly 2%, while the S&P 500 and Dow Jones fell 1.52% and 1.62%, respectively.
Trader sentiment has worsened as the Trump administration repeatedly extended deadlines for attacking Iran. With the Strait of Hormuz remaining a maritime no-go zone, fears of a global recession are growing by the day. The diplomatic impasse between Washington and Tehran suggests that a solution may require major military escalation, specifically the potential occupation of Kharg Island.
Such maneuvers would pose a significant black swan risk to global markets. Bitcoin traders are bracing for a volatile 48 hours, given the history of regimes implementing bold military orders on weekends when traditional exchanges are dark.
Meanwhile, Bitcoin has retreated from its March 17 high of $76,013, implying a 14% drawdown, but the asset could still end the month with a modest loss of less than 5%. The long-term outlook for 2026 remains bleak. Since opening at $90,000 on January 1, Bitcoin has fallen more than 25% of its value. As the first quarter draws to a close, BTC currently ranks as one of the worst-performing risk assets of the year, putting the “digital gold” narrative to the test.
Frequently asked questions ❓
- Why did Bitcoin fall below $66,000? Geopolitical tensions and a decline in US stocks led the decline.
- How much value has been lost in the crypto market? Nearly $10 billion in Bitcoin and nearly $14 billion in total option expiry pressure.
- What role did the world market play? While Wall Street plunged, trading in Asia and Europe was flat.
- Is Bitcoin still a safe hedge? The company’s “digital gold” claims are weakening amid recession concerns.
