The situation in the Middle East escalates, impacting risk assets. Bitcoin surged but then fell back below $70,000.

After briefly breaking through the $70,000 mark on Monday, Bitcoin turned back down. Concerns about the possibility of a prolonged Middle East conflict dragged down the largest cryptocurrency and other risk assets. During the European morning trading session, Bitcoin fell all the way, down 2.59% to $67,320 by the time of writing. With investors withdrawing from risk assets, the crypto market as a whole is under pressure, with mainstream tokens such as Ethereum and Solana generally trending lower. Over the weekend, the US-led coalition carried out airstrikes against Iran, prompting Iran to intensify its attacks on US and its allies' targets in the Middle East, and threatening to block the key global trade route, the Strait of Hormuz. The geopolitical tensions continue to escalate, driving funds to pour into safe-haven assets. In response to the price correction, Apollo Crypto's research director Pratik Kala believes it is a normal phenomenon. "Bitcoin entered a cooling-off period after a strong volume rise yesterday," Kala pointed out. Since early February, Bitcoin has been fluctuating in the range of $65,000 to $70,000, and any breakout above this range could trigger profit-taking. The Asia-Pacific market is also under pressure. The MSCI Asia-Pacific Index fell sharply by 2.8%, marking the largest two-day decline since April last year. As the second-best performing stock market globally this year, the South Korean composite index plummeted by 6.9%, marking the most brutal single-day sell-off since August 2024. Meanwhile, international oil prices surged, with market expectations suggesting that this supply disruption could be the most severe since 2022. Bitcoin's recent reaction to geopolitical shocks has called into question its narrative as "digital gold" - a concept long pushed by cryptocurrency enthusiasts. In contrast, spot gold has been on a four-day upward trend, entering a consolidation phase on Tuesday.