US Attacks on Iran Pressure Crypto, Bitcoin Weakens Again
Bitcoin weakened on Tuesday (May 26th), falling back below US$77,000 after new US attacks on Iranian targets dampened optimism about a near-term peace deal. In the European session, Bitcoin (BTC) was trading around US$76,649, down around 0.95% on the day.
Reports indicated that the US military carried out strikes in southern Iran on Monday against missile launch sites and ships suspected of being involved in mine-laying. The US called the action "defensive" and did not signify the end of the ceasefire, but markets are reassessing the risk of escalation after President Donald Trump said talks with Iran were "going well."
From a fundamental transmission perspective, rising geopolitical uncertainty tends to encourage a rotation into defensive assets like the dollar and gold, while riskier assets, including crypto, weakened. At the same time, oil rebounded nearly 2% in Asian trading, maintaining inflation concerns, which in turn could strengthen the case for prolonged high interest rates and limit risk appetite.
Pressure is also coming from the flow side. Demand for spot bitcoin ETFs in the US, a key driver this year, is starting to show signs of slowing after a period of strong institutional buying. In the interest rate market, high Treasury yields and expectations of more limited Fed rate cuts have also weighed on the valuations of non-cash-flow assets like crypto, especially ahead of this week's US inflation data releases, including the PCE on Thursday.
Altcoins moved lower in line with market caution. Ethereum (ETH) was trading around US$2,095. Among other major assets, XRP was in the US$1.34–1.35 range, while the Polygon ecosystem token, now traded as POL (ex-MATIC), was trading around US$0.0926. (Arl)
Source: Newsmaker.id
