- A crypto crash is going on today as a risk-off sentiment has prevailed.
- The decline happened as the odds of a prolonged war in Iran continued.
- There are concerns about the CLARITY Act, which is seeing opposition in Congress.
A crypto crash restarted on Thursday, with Bitcoin price falling below the important support level at $70,000 and the valuation of all tokens falling by 2.80% to $2.36 trillion. Top altcoins like Siren, River, Dogecoin, and Solana are falling by over 5%.
Crypto Crash Resumes Amid Elevated Iran War Risk
Bitcoin and most altcoins retreated on Thursday as concerns about the ongoing US-Iran war accelerated, leading to higher crude oil prices.
American and global stocks also retreated, with the Nasdaq 100 and S&P 500 indices falling by over 115 and 20 points, respectively. In Europe, the DAX, CAC 40, and FTSE 100 indices dropped by over 1%.
Crude oil prices jumped, with Brent and the West Texas Intermediate (WTI) rising to $100 and $93, respectively. This happened as concerns that the Iran war will continue for longer than initially expected.
In a Truth Social post, President Donald Trump threatened more escalation after Iran rejected his push for peace talks.
Iran has insisted that it will only negotiate when the US and Israel end their aggression and when the country is paid for the damages. Iran also wants concrete measures to ensure that the war is not reimposed on the country.
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Meanwhile, Axios and other US media companies have signaled that Trump was considering sending boots on the ground, potentially to occupy Kharg Island.
Such a move would lead to a prolonged war in the country. It would also push Iran to activate Houthi rebels in Yemen, a move that would lead to higher oil and natural gas prices for longer.
Crypto Traders Have Embraced a Risk-Off Sentiment
Therefore, the crypto crash is happening as investors embrace a risk-off sentiment. Indeed, the Crypto Fear and Greed Index remains in the fear zone of 31, while government bond yields are rising, with the ten-year and 30-year rising to 4.35% and 4.92%, respectively.
In most cases, when this reversal happens, some of the best gainers in the previous day are usually the top laggards.
For example, after soaring to a record high of $4.6 earlier this week, the SIREN price tumbled by over 17% on Thursday. Similarly, River and Kite prices dropped by 15% and 12% after soaring by double digits a day earlier.
Tokens like Solana and Dogecoin are also falling today as demand from the ETF market fades. Data shows that the spot DOGE ETFs have not had any inflows since March 16. They hold just $7.6 million in assets. Solana ETFs have had just $4.64 million in inflows this week, down from $21.1 million a week earlier.
At the same time, there are concerns about the CLARITY Act, which is at risk of failing again because of the stablecoin yield issue. Coinbase has vowed to continue fighting the bill because it bans exchanges from giving yield.
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