Bitcoin (BTC-USD) dropped below $67,000 on Sunday night after recovering from a sharp sell-off immediately following US-Israel air strikes on Iran and subsequent counterattacks in the region.
The token fell roughly 1% over the past 24 hours, as US stock futures also moved lower as the Middle East conflict rattled global markets.
The world’s largest cryptocurrency dropped to around $63,255 early Saturday amid the strikes. That same day it climbed above $68,000 as reports spread that Iran’s Supreme Leader Ayatollah Ali Khamenei had been killed.
Ether (ETH-USD) traded near $1,950 on Sunday after tumbling roughly 10% in the wake of the attacks.
“Crypto’s resilience in the face of geopolitical escalation is constructive and suggests room for tactical upside as defensive positioning unwinds” Sean Farrell, head of digital assets at Fundstrat, told Yahoo Finance on Sunday.
However, the strategist noted that geopolitical sell-offs are typically buyable unless they lead to a more sustained economic impact, in this case through energy markets.
On Sunday night crude futures surged with Brent crude (BZ=F) jumping by as much as 13% while West Texas Intermediate (WTI) crude rose nearly 10%.
"Crude remains the critical risk variable, and any further escalation that materially disrupts shipping lanes or energy flows would likely negate this constructive near-term view," said Farrell.
Bitcoin is down 23% year-to-date after notching a fifth straight month of losses in February.
The token has struggled to find footing after tumbling from an all time high of $126,000 in October.
Wall Street has lowered year-end forecasts with even the most bullish analysts seeing a scenario where the crypto currency could drop toward the $50,000 level before rallying in the second half of this year.