Bitcoin fell below $77,000 on Tuesday as renewed U.S. strikes on Iranian targets dampened hopes for a near-term peace deal, while declining exchange-traded fund (ETF) inflows added further pressure on the world's largest cryptocurrency.
Bitcoin last traded at $76,946.70, down 0.60%, by 9:43 a.m., after having approached levels of $78,000 in the previous session.
Uncertainty surrounding peace in the Middle East and declining ETF inflows are weighing on the market.
The U.S. military conducted new strikes in southern Iran on Monday targeting missile launch sites and mine-laying boats, according to reports.
The United States stressed that these strikes were defensive in nature and did not mean that the ceasefire with Iran had ended.
This came after US President Donald Trump stated on Monday that talks with Iran were going well.
Renewed geopolitical uncertainty has pushed investors toward safer assets such as the dollar and gold, while weighing down stocks and cryptocurrencies.
Oil prices rebounded by about 2% in Asian trading, keeping inflation fears high.
This latest drop in Bitcoin follows a volatile month for the digital asset, as traders repeatedly swung between optimism about a possible breakthrough in US-Iranian relations and fears of an escalation of the conflict.
Demand for ETFs, a key support pillar for Bitcoin this year, has also shown signs of slowing. US-based Bitcoin spot ETFs recently recorded net outflows, following a strong wave of institutional buying earlier this quarter.
Analysts noted that rising Treasury bond yields and persistent inflation concerns continue to weigh on the outlook for cryptocurrencies, amid declining expectations among traders that the US Federal Reserve will cut interest rates in the near term.
Investors will be focused on key U.S. inflation data due later this week, with the personal consumption expenditures (PCE) index – the Federal Reserve’s preferred measure of inflation – expected on Thursday for further clues about the path of interest rates.
Cryptocurrency prices today: Altcoins decline
Most alternative currencies also declined on Tuesday, continuing their losses amid a cautious mood.
Ethereum, the world's second-largest cryptocurrency, lost 0.30% to reach $2,101.75.
XRP, the world's third-largest cryptocurrency, fell 0.70% to $1.35.
Solana fell by 1.40%, Cardano declined by 0.70%, while Polygon rose by 1.40%.
Regarding meme coins, Dogecoin slipped by 1.30%.
