Bitcoin led a sharp recovery across the cryptocurrency market over the past two days, rebounding after a sudden sell-off triggered by geopolitical tensions.
On February 28, following the first reported strike involving United States and Israel against Iran, Bitcoin fell from $68,000 to near $63,000, marking an intraday decline of roughly 8%.
After dipping to $64,758, the asset staged a swift reversal, reclaiming the $68,000 level and triggering a short squeeze that caught bearish traders off guard. The rebound lifted the total cryptocurrency market capitalization by more than 4%, signaling renewed risk appetite despite lingering uncertainty.
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However, analysts warn that the rally may prove fragile as the crypto asset retraced slightly to $66,035 at the time of this report, as Market observers note that if geopolitical tensions persist beyond a week, Bitcoin could fall below the psychologically important $60,000 threshold.
“After news of Iran’s Supreme Leader Khamenei’s death, the market pumped because people are taking it as the end of the US-Iran war,” commented analyst Ash Crypto on Sunday.
“If this conflict shows signs of resolution before Monday’s open, I think Bitcoin can hold its gains and move higher,” he added.
Traders are braced up as some analysts do not expect this to end in a few days. According to reports, U.S. leadership has indicated the campaign may continue for weeks, potentially lasting around a month as part of broader military objectives.
Market sentiment indicators currently reflect “Extreme Fear,” a level last observed during the 2018–2019 bear market and the collapse of FTX in 2022. Historically, similar sentiment conditions have been followed by prolonged accumulation phases lasting several months, often preceding new bullish cycles.
Technical sentiment remains divided. Popular market analyst Captain Faibik stated that a confirmed breakout above the $72,000 resistance zone could open the door to a rally toward $82,000–$83,000 in March. Yet seasonal trends provide little reassurance. Bitcoin has now recorded five consecutive monthly declines beginning in October 2025, while historical data shows March typically delivers a median return of ?1.31%.
A key structural concern remains Bitcoin’s growing correlation with traditional financial markets. The cryptocurrency’s 30-day rolling correlation with the broader equity market currently stands at 0.55, up from approximately 0.50 in October 2025. This strengthening relationship suggests Bitcoin continues to behave as a risk-on asset rather than a hedge against market instability.
Notably, rising global trade tensions tied to policy moves by U.S President Donald Trump and fears of wider Middle East conflict have added pressure to equities, indirectly weighing on cryptocurrency performance.
According to Kevin Crowther, founder of KC Private Wealth, this trend undermines Bitcoin’s traditional investment narrative.
“Bitcoin’s high correlation to software stocks weakens its case as a hedge asset in times of uncertainty, and so as Trump continues to elevate economic uncertainty, continued BTC weakness should be expected,” Crowther said.
From a technical perspective, Bitcoin faces immediate resistance near $67,000. Failure to break above this zone could trigger renewed downside pressure. Initial support sits around $65,500, with stronger support near $65,000, aligning with the 61.8% Fibonacci retracement of the recent upward move.
Additional downside levels include $64,250 and $64,000, while $63,000 remains the primary support threshold that may determine near-term recovery prospects.
Outlook
Bitcoin’s near-term trajectory remains closely tied to geopolitical developments and broader market sentiment. Continued escalation in global tensions or sustained weakness in equities could pressure prices toward lower support levels. Conversely, a decisive break above $72,000 would likely restore bullish momentum and potentially trigger a broader market recovery.
While extreme fear conditions historically precede accumulation phases, the cryptocurrency’s growing alignment with traditional risk assets suggests that macroeconomic forces, rather than crypto-native catalysts may dominate price direction in the weeks ahead.