Bitcoin has responded predictably to the conflict between the United States and Iran, maintaining a trend that has consistently emerged during past geopolitical tensions. Crypto prices are processing the latest developments, with analysts drawing parallels between the current price structure and similar instances in 2022 and 2023, when Bitcoin first experienced sell-offs before mounting significant recoveries. Current geopolitical tensions are emerging during an already delicate phase for the crypto market. Bitcoin has already declined 48% from its all-time high and is poised to close its fifth consecutive monthly candle in the red. The leading cryptocurrency has experienced its most challenging beginning to the year, plummeting 24% since January. February concluded with a decline of 14.8% from its opening, marking it as the third-worst February recorded in Bitcoin’s history. Februarys have seen weaker performances only in 2025, with Bitcoin closing 17.5% below its open, and in 2014, when the monthly close was 33% below its open.
Ted Pillows presented a weekly chart illustrating Bitcoin’s performance during past diplomatic escalations. In February 2022, following Russia’s attack on Ukraine, Bitcoin experienced a decline before surging by around 40% in the subsequent months. In June 2025, following Israel’s attack on Iran, Bitcoin experienced an initial sell-off; however, it subsequently rebounded by approximately 25%. In the wake of US strikes on Iran on Saturday, Bitcoin has once again experienced a downturn. The inquiry posed by Pillows is whether the same post-shock recovery pattern will manifest once more. Another analyst, Sherlock, concentrated on immediate responses. He observed that in previous instances of US or Israeli strikes on Iran, Bitcoin generally experienced a significant decline over the weekend, followed by a recovery within a timeframe of 24 to 48 hours.
In April 2024, following Iran’s strike on Israel, Bitcoin experienced an 8% decline overnight but managed to recover within two days. In October 2024, a 3% decline was completely reversed within a span of 24 hours. In June 2025, US strikes resulted in a 6% decline that was regained by Sunday, followed by a 62% rally over the subsequent two months, reaching new all-time highs in October. Notably, the first decline in each instance took place prior to the reopening of conventional financial markets. The current setup differs from previous episodes, as Bitcoin was already experiencing a robust uptrend during the 2025 geopolitical shock. Today’s market structure presents a stark contrast, with Bitcoin experiencing a prolonged drawdown that has lasted for five months.
Bitcoin’s weekly RSI stands at its lowest level ever recorded. The Fear & Greed Index has remained in a state of extreme fear for 22 consecutive days. Moreover, leveraged positions have seen a significant decrease, as open interest remains at low levels. Panic selling in earlier cases occurred after the geopolitical event had taken place. This time, though, a significant portion of the forced selling and deleveraging seems to have taken place prior to the strike. In light of this caveat, those with weak hands have predominantly exited, and excess leverage has been largely eliminated. Consequently, Bitcoin might not endure extended declines due to the tensions and could find stability more quickly than in past instances.