Middle East escalating war has made the market "extremely fearful"! "Risk asset indicator" Bitcoin falls to a two-week low.

Recently, the world's largest market cap cryptocurrency, Bitcoin, saw a moderate rebound, but fell back again as the conflict between the US/Israel and Iran escalated out of control. It is understood that during Monday's Asian session, the Bitcoin trading price fluctuated near the lowest point in two weeks. As tensions in the Middle East escalated, a sense of "extreme fear" swept through every corner of the global financial market. Asian stock markets collectively plummeted on Monday, with some even describing it as a "black Monday." The markets in Japan and South Korea experienced steep drops, with copper prices falling to a three-month low and spot gold dropping nearly 9%, erasing all gains made so far this year. Spot silver also fell nearly 8% during the day. In early Asian trading, Bitcoin fell nearly 2%, but later rebounded to a crucial support level. On Monday, as the US-Iran conflict entered its fourth week and the deadline for Trump's ultimatum approached, both sides escalated their rhetoric. Bitcoin, known as a "risk asset barometer," along with global stocks, bonds, and gold assets, all simultaneously declined. Skyrocketing oil prices leading to higher inflation expectations and deteriorating economic growth prospects forced investors to reassess the monetary policy paths of major central banks like the Fed, with market sentiment leaning towards a defensive stance. During early Asian trading on Monday, Bitcoin dropped to as low as $67,371, hitting its lowest level since March 9th. For most of the day, it hovered near $68,000 - a crucial technical support level at the 200-week moving average. The weak performance of this risk asset barometer reflects a broader pullback in global stocks and other risk assets, mainly due to escalating tensions in the Middle East over the weekend. President Trump threatened to bomb Iran's core power infrastructure, including power plants, if Iran did not reopen the vital global trade route of the Strait of Hormuz. In response, Tehran warned that if its fuel and energy infrastructure were attacked by the US and Israel, it would strike key infrastructure across the entire Middle East region. Latest reports indicate that the situation in the Middle East is still out of control and tensions are escalating. Iran's Defense Committee issued a statement saying that if the enemy attacks Iran's coast or islands, Iran will immediately lay various types of mines in all the waterways of the Persian Gulf. A spokesperson for Iran's Armed Forces Central Command, Hatam Anbia, stated that due to Iran's precise strikes and strategic deployments, the multi-layered defense networks of the US and Israel in the West Asian region have collapsed, disrupting weapon supplies and leading to a reversal in the overall situation. Iran has effectively "semi-blocked" the Strait of Hormuz, disrupting about 20% of global energy flows, leading to attacks on oil tankers and interruptions in shipping. A recent study by the International Energy Agency (IEA) showed that the US and Israel's military actions against Iran at the end of February caused the largest supply disruption in global oil markets in history. Meanwhile, the US government is considering restoring shipping routes and seizing control of the Strait of Hormuz through military means, including potential ground or semi-ground control. Reports surfaced on Friday that the White House is deploying hundreds of US Marine Corps troops to the Middle East and considering a plan to send ground forces to seize Iran's oil export hub in the island of Kharq. Brent crude oil has been hovering around $110 per barrel, suggesting a persistent threat of high oil prices. Investors, central bank policymakers, and corporate leaders have to face this reality. It is noted that Kharq Island is Iran's largest oil export base, from which 90% of Iran's oil is exported. Rachael Lucas, a senior analyst at BTC Markets, commented on the impact of geopolitics on Bitcoin: "The main trigger is geopolitics. President Trump issued a 48-hour ultimatum, threatening to completely destroy Iran's power plants unless the Strait of Hormuz is reopened. This threat has significantly increased Brent crude oil prices and severely impacted global risk assets." So far this month, the impact of the Iran conflict on Bitcoin has been relatively small compared to more traditional assets. On Monday, despite an initial surge in international oil prices followed by a slight increase, the price of gold dropped by over 3%, almost wiping out its gains for the year. This traditional safe-haven metal has dropped by 17% this month, marking the longest consecutive decline since October 2023. WTI crude oil saw a 3.0% increase during the day and remained stable above $100 per barrel, with the latest price at $101.21 per barrel. Asian stock markets opened low, and global government bond yields rose significantly. Stock indices in Japan and South Korea experienced a significant decline, while the MSCI Global All Country Stock Index - the broadest indicator of global stock markets - further widened its decline for the year. Asian stock markets experienced a three-day consecutive decline, nearing a technical retracement level, with the MSCI Asia-Pacific Index falling by 3.5% and the Korean stock market plunging by 6.5%, while the Nikkei 225 index closed down by 3.5%. Meanwhile, Bitcoin saw a 4% increase in March. For a significant risk asset like Bitcoin, which had dropped by 45% from its peak of $126,251 in October, this period of stability could be considered relatively calm. During the fourth quarter, the cryptocurrency market experienced a significant sell-off, putting pressure on prices. At the crucial level of $68,000, Bitcoin is hovering around its 200-week moving average - an important psychological trend line for this cryptocurrency asset. Pratik Kala, Research Head of Apollo Crypto, commented: "From a historical perspective, these areas have always been excellent accumulation zones for Bitcoin assets if you lean towards being bullish." Despite this, cryptocurrency trading remains sluggish. A market sentiment index compiled by Coinglass remains at an "extreme fear" level, with 25 negative days out of the past 30. In the middle of last week, the net inflow of funds into US-listed spot Bitcoin exchange-traded funds (Bitcoin ETFs) turned negative, with a significant outflow of $305.8 million in three days, although these ETF funds still recorded net inflows of approximately $95 million throughout the week. Haider Rafique, Global Managing Partner of the crypto exchange OKX, stated: "Weeks with such intense volatility often test the new narrative logic of Bitcoin as a 'safe haven for the new era,' especially as its price trend has been more in line with other risk assets recently rather than diverging."