Synopsis: Bitcoin plunged to $63K (-4%) after US-Israel strikes on Iran killed Ayatollah Khamenei on Feb 28, 2026, sparking $657M liquidations. Rebounded to ~$66K by Mar 2 amid volatility; crypto acts as weekend risk valve.
Explosions rocked Iran on the night of February 28, 2026. Within hours, Bitcoin crashed. The United States and Israel launched coordinated airstrikes on Iranian nuclear sites, military bases, and government compounds. Crypto markets open 24 hours a day felt the shock immediately. Bitcoin dropped nearly 4% in a matter of hours. Meanwhile, stock and bond markets stayed closed for the weekend, leaving crypto to absorb the blow alone.
Furthermore, the strikes marked a dramatic escalation. Iranian Supreme Leader Ayatollah Ali Khamenei died in a missile strike near Tehran. Iran confirmed his death on March 1, 2026, and announced a 40-day national mourning period. Across the globe, investors scrambled to react and Bitcoin bore the initial brunt.
Traditional Markets Stay Dark
Bitcoin slid from around $67,000 to a low of $63,000 on Saturday morning. That drop wiped out gains from earlier in the week. The token hit its lowest level since the February 5 crash, when it briefly dipped below $60,000. Liquidations surpassed $250 million in just four hours. Over 24 hours, total liquidations reached $657 million, affecting 157,000 traders.
The broader crypto market lost about $128 billion a 5.1% drop in the initial hours. Ethereum fell to around $1,840, down 8%. XRP dropped to $1.37, and Solana slid to $84. Sentiment trackers recorded “extreme fear” across the market. Additionally, over $100 million in leveraged long positions vanished in just 15 minutes.
Bitcoin also heads into March on a weak footing. It now faces its fifth consecutive month of losses. That streak has not occurred in seven years. Hot U.S. inflation data on Friday added further pressure. Bitcoin bulls tried and failed to reclaim support near $70,000 just days before the strikes.
Bombs Fall on Iran’s Nuclear Program
U.S. President Donald Trump confirmed the operation in a video address on Saturday. He said the strikes targeted Iran’s nuclear infrastructure directly. He also called on Iranian citizens to take control of their own government.
“This will be, probably, your only chance for generations,” Trump said. He told the Washington Post that “all I want is freedom for the people.” A U.S. official confirmed American participation in the strikes to The Wall Street Journal.
The strikes followed weeks of failed negotiations over Iran’s nuclear program. They also came after a month-long U.S. military buildup in the Middle East. Iran fired missiles back at U.S. bases in Bahrain and Israeli cities, including Tel Aviv. Israeli Defense Minister Israel Katz declared a nationwide state of emergency. Reports confirmed explosions in Tehran and Hormozgan province, with Iranian state media claiming at least 70 deaths.
Moreover, the strikes hit a populated area. Reports included a strike near an elementary school in Hormozgan province. International backlash followed quickly. NATO said it was “closely following” developments. China urged an immediate ceasefire, and Turkey offered to mediate.
Why Crypto Absorbs the Shock When Markets Close
Bitcoin trades around the clock, every day of the year. Stocks, bonds, and currencies do not trade on weekends. As a result, Bitcoin becomes one of the only large, liquid assets available to sell. When geopolitical risk spikes outside market hours, traders exit through crypto. This makes Bitcoin act as a pressure valve for broader risk-off sentiment.
Trading resource The Kobeissi Letter described the conflict plainly on social media: “The U.S. and Israel now appear to be at war with Iran for the second time in 8 months.” Kobeissi pointed to a previous Iran offensive in 2025 that triggered sharp moves in crypto. Similarly, this time, thin weekend order books made price swings larger and faster.
The conflict also threatens oil shipments through the Strait of Hormuz. Disruptions there could rattle global supply chains and commodity markets. Iran’s $7.8 billion shadow crypto economy also came under scrutiny. Analysts warned that the conflict could trigger regulatory ripple effects on digital asset flows. Meanwhile, safe-haven assets surged gold climbed 6% as Bitcoin dipped.
Also Read: Are Bitcoin ETFs quietly accumulating or just not selling? The flow data that matters
Bitcoin Bounces Back
Despite the initial crash, Bitcoin showed resilience. It rebounded over $5,000 within 24 hours, climbing back toward $67,000–$68,000. Markets appeared to treat Khamenei’s confirmed death as a possible de-escalation signal. Ethereum stabilized near $2,000, up 10% from its low. Oil-linked crypto futures surged 5%, reflecting broader commodity volatility.
As of March 2, 2026, Bitcoin trades at approximately $66,800 USD. That marks a gain of about 0.8–1.6% in the last 24 hours. However, Bitcoin still sits below its pre-strike levels. 24-hour trading volume stands at $38–40 billion, with a market cap near $1.34 trillion.
Key support for Bitcoin holds at $63,000. Resistance sits around $68,000. Analysts note that historical patterns often show strong recoveries after conflict-driven sell-offs. Nevertheless, Bitcoin remains fragile amid macro pressures including ETF inflows and potential oil price spikes.
In short, if tensions ease, analysts expect a relief rally. If the conflict deepens, Bitcoin could test lower supports near $60,000 again. The coming days will test whether the market’s bounce reflects real confidence or just relief.
Written By Fazal Ul Vahab C H
