Bitcoin Drops to $74K as US-Iran Tensions Flare

Bitcoin erased its weekend gains as it fell below $74,000 on Sunday after the US military seized an Iranian cargo ship, putting pressure on a ceasefire between the two countries. 

Bitcoin (BTC) had soared above $78,300 late Friday on Coinbase, its highest price since early February, but dropped to between $75,000 and $76,000 over the weekend after Iran said it would close vital oil routes in the Strait of Hormuz.

The cryptocurrency then sank sharply late on Sunday to briefly trade below $74,000 after the US military said it opened fire on, and later seized, an Iranian cargo ship it claimed tried to run its blockade of Iranian ports, with Tehran accusing the US of violating an agreed ceasefire. 

The two-week ceasefire between the US and Iran, which had helped boost the markets and temper oil prices, is set to end on Wednesday.

Tehran has vowed to retaliate over the US military’s seizure of the ship and has rejected a new round of peace talks slated for Monday in Islamabad, Pakistan, due to the US blockade, Iranian state media reported.

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US stock futures sank Sunday night amid rising tensions, with S&P 500 futures dropping 0.8%, Nasdaq-100 futures falling 0.6% and Dow Jones futures declining 0.9%, or about 450 points.

Oil futures also soared amid the hostilities and Iran’s threat to close the Strait of Hormuz, with crude oil futures rising over 4.5% to over $95 a barrel.

The Crypto Fear & Greed index rose by two points to a score of 29 out of 100 on Monday, its highest score since late January, but which still indicated a sentiment of “fear.”

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