Bitcoin Falls Below $77,000 as Iran Tensions and Inflation Fears Shake Market

Bitcoin fell below $77,000 on Sunday night as investors reacted to rising tensions between the United States and Iran and growing worries about inflation.$BTC dropped 1.2% over the last 24 hours, trading near $76,900 after touching a daily low around $76,720.

The decline came only days after bitcoin climbed close to $82,000, helped by strong inflows into spot Bitcoin exchange-traded funds (ETFs) and optimism around the proposed U.S. Clarity Act. However, market sentiment changed quickly as geopolitical concerns returned.

Several factors pushed prices lower, including rising Treasury yields, a stronger U.S. dollar and growing geopolitical uncertainty. Treasury yields recently climbed to their highest levels in 12 months, adding pressure on risk assets such as cryptocurrencies.

Iran Tensions Push Oil Prices Higher

The market reaction intensified after U.S. President Donald Trump warned Iran in a Truth Social post, saying delays in reaching a peace agreement could result in military action. Trump wrote that Iran should “get moving, FAST, or there won’t be anything left of them.”

Following the statement, oil prices jumped sharply. Brent crude rose 1.78% to $111.2 per barrel, while West Texas Intermediate (WTI) crude gained 2.2% to $107.7.

Inflation Fears and ETF Outflows Add Pressure

BTSE Chief Operating Officer Jeff Mei said investors are worried that higher oil prices may keep inflation elevated, which could force the Federal Reserve to maintain higher interest rates or even raise them further.

Data from SoSoValue showed Bitcoin ETFs recorded nearly $1 billion in weekly net outflows for the week ending May 17, breaking a six-week inflow streak. Min Jung, associate researcher at Presto Research, said institutional investors may be reducing short-term exposure as hopes for rate cuts continue to fade.

Bitcoin’s Fear and Greed Index also slipped to 39, moving close to the “fear” zone after remaining in a neutral range between 40 and 50 earlier in the week.

Bitcoin may remain sensitive to headlines in the coming days, with major price moves likely depending on inflation data, Treasury yields and developments around the Clarity Act.