Bitcoin Price Declines to $77K as US-Iran Tensions Escalate

Bitcoin fell further on January 31, 2026, trading below $77,000 after touching intraday lows not seen since earlier in the month. The cryptocurrency has now lost more than 12% from its recent peak near $87,000 just a week ago, with the bulk of the earlier portion of the move tied to institutional profit-taking and shifting monetary policy expectations. Today’s additional leg lower, however, has been driven primarily by a surge in geopolitical risk stemming from rapidly deteriorating relations between the United States and Iran.

The market had already been digesting a series of macro pressures in recent days, including heavy outflows from spot Bitcoin ETFs and the Federal Reserve’s decision to pause rate cuts. Those factors contributed to the initial wave of selling that began mid-week, but the intensified focus on potential military confrontation between the U.S. and Iran has pushed risk assets broadly lower in trading. Investors are increasingly concerned that an escalation could disrupt global energy markets and trigger a wider risk-off environment.

Escalating US Iran Tensions Emerge as Primary Catalyst

Reports of an explosion at Iran’s Bandar Abbas port, combined with heightened rhetoric from Washington regarding possible preemptive military action, have dominated headlines over the past couple days. Some U.S. officials have openly discussed scenarios ranging from targeted strikes to broader intervention, raising the specter of a direct conflict. While no formal invasion plans have been confirmed, the mere possibility has been sufficient to drive safe-haven flows into gold, the Japanese yen, and U.S. Treasuries at the expense of risk-sensitive assets like cryptocurrencies and equities.

Bitcoin has failed to decouple, moving in lockstep with major stock indexes as investors treat it as a high-beta macro play rather than digital gold. Over $1.4 billion in leveraged long positions were liquidated across exchanges as prices broke lower, exacerbating the downside momentum in thin weekend liquidity. The speed of the move underscores how quickly market sentiment can shift when geopolitical flashpoints re-emerge after a period of relative calm.

The earlier part of the correction had been more gradual and tied to domestic U.S. factors. Spot Bitcoin ETFs recorded their heaviest weekly outflows since early 2025, exceeding $1.6 billion as institutions rebalanced portfolios and locked in gains from the 2025 rally that carried the price above $126,000. Many funds reduced exposure amid fading optimism around pro-crypto policy momentum and concerns over potential tariffs and fiscal instability.

The Federal Reserve’s January 28 decision to hold rates at 3.50 to 3.75% further dampened expectations for near-term liquidity boosts. Strong economic data has pushed market pricing for additional cuts further out, reinforcing a higher-for-longer rate environment that tends to pressure growth-sensitive and speculative assets. Speculation about leadership changes at the central bank has only added to the cautious tone among institutional investors.

Geopolitical uncertainty has now taken center stage, amplifying the existing macro headwinds. Traditional safe havens have attracted capital while Bitcoin and equities face continued selling pressure.

The convergence of these forces has created a challenging backdrop following the euphoric gains of 2025. Some view the current pullback as a necessary reset that clears excess leverage, while others caution that a prolonged standoff could push prices toward deeper support levels. Upcoming statements from U.S. and Iranian officials, along with any fresh economic data, will be critical in determining whether the selling exhausts itself or extends into February.