Bitcoin Rebounds to $106K After Middle East Escalation, but Analysts Warn of More Pain Ahead

Bitcoin staged a modest recovery to around $106,000 on Friday after briefly dipping as low as $102,600 amid escalating geopolitical tensions between Israel and Iran. The bounce came after a sharp sell-off triggered by Israeli airstrikes targeting military and nuclear sites in Iran, which rattled global markets and sent investors scrambling for safer assets. In a flight to security, gold surged by nearly 1%, while oil prices spiked on fears of broader regional instability. Meanwhile, Bitcoin, often touted as “digital gold,” failed to act as a haven in the moment of crisis—losing over 4% in a 24-hour span before clawing back some ground.

The crypto market as a whole mirrored Bitcoin’s volatility. The CoinDesk 20 Index slid 4.4% during the initial drop, with major altcoins such as Ethereum (ETH), Avalanche (AVAX), and Toncoin (TON) seeing losses ranging from 6% to 8%. According to liquidation data from CoinGlass, more than $1 billion in leveraged positions were erased in the aftermath of the shock news, including over $427 million from Bitcoin longs alone. This reflects not only investor nerves but also the growing influence of high-leverage trading in amplifying price movements during periods of macro uncertainty.

Market experts warn that while Bitcoin’s ability to rebound above $106,000 is encouraging, the path ahead remains rocky. Markus Thielen, Head of Research at 10x Research, highlighted the lack of follow-through momentum, suggesting that this may be a temporary bounce rather than a reversal. Thielen noted that Bitcoin needs to hold above $100,000–$101,000 to avoid triggering deeper pullbacks. John Glover, CIO at crypto financial firm Ledn, offered a more bearish take, suggesting Bitcoin could retreat into the $88,000–$93,000 range before finding a firm base to attempt a climb toward new highs around $130,000.

Despite near-term caution, there are signs of underlying strength in the Bitcoin market. Spot Bitcoin ETFs, which now serve as a major institutional access point to the asset class, reported net inflows of $86 million on the same day the price dropped. This suggests that some professional investors saw the dip as a buying opportunity. Moreover, on-chain data shows a persistent pattern of Bitcoin being withdrawn from exchanges—over 3.8 million BTC have been pulled off platforms in the last five years—indicating a growing number of long-term holders who are not easily shaken by price swings or geopolitical flare-ups.

As tensions between Iran and Israel continue to evolve, traders are closely watching both global developments and technical indicators for Bitcoin. The market remains highly reactive to news cycles and macroeconomic shifts, underscoring the challenges of treating BTC as a traditional safe haven. Until the dust settles, volatility is likely to remain the name of the game for crypto investors.