Bitcoin has dropped back below $70,000 on Thursday morning following reports that the Pentagon is developing military options against Iran, including the potential use of ground forces and a large-scale bombing campaign. The cryptocurrency is trading at $69,522, representing a 3% decline over the past 24 hours, according to CoinGecko data. The development comes as a five-day pause on strikes against Iran ordered by President Donald Trump is set to expire on Friday. News outlet Axios reported that U.S. military planners are actively preparing a range of options for potential action.
On prediction market Myriad, owned by Dastan, the parent company of Decrypt, users now assign a 60% probability to U.S. ground forces entering Iran before May — an increase of more than 10 percentage points within a single day. The rising odds reflect growing concern that diplomatic efforts may not prevent further conflict. While recent contact between the U.S. and Iran has hinted at possible de-escalation, analysts caution that any negotiation process is unlikely to reach a swift resolution.
Bitcoin’s pattern of higher lows since February 24 — a trend typically associated with accumulation — now faces its first significant challenge. According to a report by on-chain analytics firm Glassnode, short-term holders who purchased Bitcoin within the last month carry a cost basis of approximately $70,200, establishing that level as a developing support floor. The one-to-three-month holder cohort sits at $82,200, reinforcing overhead resistance. The Glassnode report cautioned that the accumulation cluster at $70,200 remains modest, stating that “the higher probability of a breakdown below this level cannot be dismissed until a more substantial base of committed buyers is established.”
Tim Sun, senior researcher at Hong Kong-based crypto exchange HashKey Group, told Decrypt that the $70,200 level is more likely to be tested repeatedly than broken in a single move. He noted that while some signs of accumulation by stronger hands are visible in current price action, the overall picture still resembles defensive positioning rather than the start of a trend-driven rally. Sun also warned that a break below $70,000 is not out of the question, given that the recent rally has been driven more by leverage than sustained spot buying, leaving prices vulnerable to a rapid pullback if sentiment shifts.
Broader financial markets are also reflecting elevated anxiety. Front-month VIX futures intraday volatility has surged to 388.2, the highest reading in at least six months, according to The Kobeissi Letter — roughly four times higher than levels typically associated with market panic. Despite this, the S&P 500 has recorded only two sessions with moves greater than 1.75% over the past three months. The divergence suggests investors are paying for protection against potential shocks rather than responding to disruptions already underway.
The Kobeissi Letter noted that “futures and options markets are pricing in far more volatility than the S&P 500 is actually realizing,” adding that uncertainty has reached unprecedented levels. Sun echoed this view, explaining that the wide gap between implied and realized volatility points to strong hedging demand. He added that if the anticipated tail risks materialize, Bitcoin is likely to be treated as a high-volatility risk asset, but if those risks prove overpriced, the cryptocurrency could recover quickly following any short-term turbulence.
The combination of fragile on-chain support and heightened macroeconomic uncertainty sets up a critical period for Bitcoin heading into the weekend. Myriad users remain divided on the cryptocurrency’s near-term direction, currently assigning a 50% probability to a retest of the $84,000 level. Although Bitcoin has outperformed gold and U.S. equities since the conflict began, analysts suggest that further escalation in the Middle East would likely increase uncertainty and weigh on the asset’s directional momentum.
Originally reported by Decrypt.
