Key Takeaways
Bitcoin (BTC) fell to $79,381 early on May 8 as reports of military strikes between the U.S. and Iran in the Strait of Hormuz soured risk appetite across global markets, breaking a six-week winning streak for the digital asset.
"The key point remains unchanged: the Strait of Hormuz remains effectively closed, with renewed clashes between U.S. and Iranian forces lowering the prospect of a near-term reopening," analysts at Saxo Bank said in a note. The conflict drove a flight to safety, with gold prices rising above $4,700 a troy ounce while risk assets like Bitcoin pulled back.
The move lower represents a sharp reversal from earlier in the week. Bitcoin had reached a three-month high of $82,000 on May 6, supported by a broader market rally on hopes of a de-escalation in the Middle East and strong U.S. tech earnings. The digital asset’s 30-day correlation with the tech-heavy Nasdaq 100 remains high at 0.84, according to data from Prime XBT. Brent crude, which had fallen below $100 a barrel on peace negotiations, traded firmly back above that level after the incident.
The decline comes despite continued institutional demand for spot Bitcoin ETFs, which have recorded over $1.6 billion in net inflows so far in May, according to SoSoValue data. However, the positive flows were not enough to counteract the geopolitical fears. Traders are now watching immediate support at the $78,920 level. A break below that could open the door to the $76,000 support zone, which represents the 23.6% Fibonacci retracement level from the October all-time high of $126,000.
This article is for informational purposes only and does not constitute investment advice.
