Iran Situation Rekindles Threat of War. Bitcoin Price Decline Accelerates, $75,000 Geopolitical Defense Line Faces Test

TradingKey - U.S.-Israel discussions on resuming strikes against Iran trigger an accelerated Bitcoin price pullback; future gains depend on whether the $75,000 support level holds.

On May 18, the potential reignition of conflict between the U.S. and Iran led to a Bitcoin ( BTC) price pullback acceleration, dropping below $77,000 this morning and currently trading at $76,866. Over the past seven days, Bitcoin failed in its brief sprint toward $83,000 and has since retreated steadily, falling more than 6% to date.

According to Israeli media reports on the 17th, Israeli Prime Minister Netanyahu and U.S. President Trump discussed the possibility of restarting military action against Iran in a phone call. Trump warned in an interview with Axios, "If the Iranian regime cannot propose better deal terms, they will be hit much harder than ever before."

Facing threats from the U.S. and Israel, Iran remained defiant. A senior spokesperson for its armed forces responded, "If the U.S. once again implements military threats or actions against Iran, U.S. military assets and troops in the region will face a brand-new, offensive, unexpected, and storm-like response."

News that the U.S.-Iran conflict could reignite triggered a drop in Bitcoin prices, with bulls hitting stop-loss levels and facing forced liquidations. This further sparked a liquidity stampede in the market, causing the decline to accelerate irrationally in the short term, effectively erasing the gains brought about by the Federal Reserve leadership transition and the CLARITY Act.

In early May, market expectations that the Federal Reserve leadership change would bring policy tailwinds led to an accumulation of high-leverage long positions in the derivatives market, pushing Bitcoin prices near $83,000 and reaching three-month highs. Subsequently, Bitcoin faced technical resistance and corrected for three consecutive days, briefly losing the $80,000 mark. However, a large bullish candle on May 14 reversed the previous decline, driven by the Senate committee's passage of the CLARITY Act.

In the face of a fragile market structure, the two aforementioned positive catalysts were unable to withstand the negative impact of geopolitical conflict. From a technical perspective, Bitcoin prices will continue their short-term pullback to test $75,000, representing a second retest of the neckline. If this support is broken, the bullish structure formed over the past month will be invalidated, leading to a further retreat toward the $65,000 floor. Conversely, if Bitcoin consolidates and builds strength, it will continue to target $100,000.

Bitcoin price chart, Source: TradingView

For Bitcoin to maintain the $75,000 support level, it will need support from positive news. A Federal Reserve rate cut is unlikely in the short term, so the situation regarding the U.S.-Iran conflict remains the key factor that could potentially reverse the trend. Although Trump has issued threats, no real action has been taken yet, and this may just be a tactic to gain leverage for negotiations, suggesting there is still room for maneuver in the Middle East.