Bitcoin, Ethereum Flat, While XRP, Dogecoin Dive Amid US-Iran Tensions: Analyst Compares Current Downturn To 2022, Forecasts BTC At $51,000

Leading cryptocurrencies weakened, while stocks rallied sharply on Wednesday, as the Trump administration reportedly moves closer to a military conflict with Iran.

Crypto Market Lags

Bitcoin wobbled between the high $65,000s and the low $68,000s, while trading volume dipped over the last 24 hours.

Ethereum also traded with low volatility, confined to a narrow range just under $2,000. XRP and Dogecoin recorded sharp 24-hour drops.

Shares of cryptocurrency-related companies, including Strategy Inc. (NASDAQ:MSTR)  and BitMine Immersion Technologies, Inc. (NYSE:BMNR), closed down 3.89% and 3,86%, respectively.

Over $220 million was liquidated from the market in the last 24 hours, according to Coinglass, with long liquidations again bearing the brunt of the losses. 

Bitcoin’s open interest rose 1.31% over the past 24 hours. A rising open interest paired with falling prices often signals short buildup, reflecting strong bearish sentiment.

The "Extreme Fear" sentiment gripped the market, according to the Crypto Fear & Greed Index.

Top Gainers (24 Hours) 

The global cryptocurrency market capitalization stood at $2.32 trillion, following a decline of 1.91% over the past 24 hours.

Stocks Rise, Precious Metals Stagnate

Stocks rallied sharply on Wednesday. The Dow Jones Industrial Average lifted 129.47 points, or 0.26%, to end at 49,662.66.. The S&P 500 rose 0.56% to end at 6,881.31, while the tech-heavy Nasdaq Composite gained 0.78% to close at 22,753.63.

Defense-related stocks surged after a report stated that the Trump administration is moving closer to a “major” military operation against Iran.

SPDR S&P Aerospace & Defense ETF (NYSE:XAR)  and Global X Defense Tech ETF (NYSE:SHLD), closed up 1.76% and 2.56%, respectively.

Precious metals stayed range-bound, as spot gold traded down 0.33% at $4,961 an ounce, while spot silver 0.74% to $76.61 an ounce.

Is Bottom In For Bitcoin?

Widely followed cryptocurrency analyst and trader Ali Martinez compared Bitcoin's current market with the 2022 drawdown, forecasting further declines to at least $51,000, while questioning those who are declaring "bottom is in."

Michaël van de Poppe, another prominent cryptocurrency commentator, anticipated a "big move on the horizon" for Bitcoin, following a period of low volatility.

"If we dip, I’ll be a big buyer, for sure," the analyst said. "If we go back upwards, I’ll start taking some profits on a test at $80,000-$85,000 to be trading the trend."

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