Bitcoin lost ground below $105,000 after news about Israel’s strike on Iran, with the price previously approaching coveted record highs above $110,000 before dropping once more. 

Earlier Israeli strikes on Iran today sent bitcoin down to $102,953, threatening to pierce the psychological barrier of $100,000, with traders liquidating positions worth over $450 million in a single day according to CoinGlass data.

When prices fall, traders who are highly leveraged are stopped out of their positions, which cascades into a selloff wave.

Binance data also showed the Net Taker Volumes, an index tracked by Binance, at $197 million, which indicates aggressive market orders, in this case with sell positions.

Technical Analysis Offers Little Respite 

Technically, bitcoin seems to be heading southward according to several indicators, such as the 20-day SMA and the MACD.

Intensive geopolitical escalation between Israel and Iran could send the price even lower towards $91,672.

On the flip side, a strong return of bulls and stabilization above the 20-day SMA could pave a way for a recovery towards the record near $112,000.

The US dollar is heading for its biggest one-day profit in a month as investors run to buy up the US dollar once more for safety after Israel launched strikes against Iran, prompting Iran to launch drones in response.

Military Escalation 

Israel said it targeted a large network of military bases in Iran, with Iran responding by launching a large flock of anti-Israel drones. 

Despite the attack, US and Iranian officials are still scheduled to talk in Oman on Sunday to discuss a nuclear deal and stop Iran’s uranium enrichment. 

Dollar Regains Haven Status 

At first, the Swiss franc and yen rallied before a tumble against the dollar, which regained its status as a safe haven in times of turmoil.

US President Trump urged Iran to acquiesce on a deal and avoid further military actions. 

Dollar’s Surge

The dollar rallied 0.9% against a basket of major rivals, with massive losses sustained by the euro, the pound, and the Australian dollar, with the dollar rallying 0.85% on track for the biggest profit since May 12.

The euro snapped a four-day winning streak with a 0.7% drop to $1.1494, but still remained near a four-year high.

The yen fell 0.6% against the greenback to 144.43, while the franc shed 0.52% to 0.8147.

Investors bought up US treasury bonds, with 10-year yields down 4.7 basis points to a month low at 4.31%.

Gold prices rallied 1.7% to $3444 an ounce, a May high.

Despite the gains, the dollar is still hovering near March 2022 lows after the US-China trade agreement failed to convince the markets with clear points. 

The index is expected to fall 1% this week, the heftiest loss in over three weeks.

Inflation

Recent US data showed prices remain under control, in turn boosting the odds of multiple Fed rate cuts this year.

Oil prices rose over $5 a barrel after the Israeli strikes amid concerns about supply disruptions. 

The risky atmosphere hurt cryptocurrencies, with bitcoin down 1% to $105,052, while ethereum fell 4% to $2538.

Gold prices rose in European trade on Friday on track for the third profit in a row, hitting a two-month high and on track for a record high, and the second weekly profit in a row. 

The gains come on strong haven demand amid mounting geopolitical tensions in the Middle East after Israel launched intensive air strikes against Iran.

Recent US data showed muted inflation numbers in May, thus boosting the odds of a Fed rate cut in September.

The Price

Gold prices rose 1.7% today to $3444 an ounce, the highest since April 22, with a session-low at $3379.

On Thursday, gold rose 0.9%, the second profit in a row, as the dollar fell to three-year lows against a basket of major rivals.

Israeli Strike Against Iran

Israel launched a heavy military operation against Iran, targeting nuclear facilities and ballistic missile factories and military leaders.

The Israeli army said the operation aims at preventing Tehran from developing a nuclear weapon and described it as the start of a long-term military operation, with Israel's air space closed in preparation for Iranian responses.

US officials asserted that America hasn’t participated or supported the operation.

The US administration started to transport some of its personnel from several Middle Eastern countries and warned from heightened security risks, while spreading  additional air defense systems to protect US military bases in the region.

The attack could threaten oil supplies in the region, especially from Iran, driving up prices and drying up the market. 

US Rates

Recent data showed US inflation rose less than expected in May, with limited effects so far for Trump’s tariffs on prices.

Following the data, traders raised their estimates for a Federal Reserve rate cut in September.

The markets now see an 80% chance of a Fed rate cut in September, with a second cut in October. 

SPDR

Gold holdings at the SPDR Gold Trust rose 3.72 tons yesterday to a total of 937.91 tons, the highest since May 12.

The euro fell in European trade on Friday on track for the first loss in five sessions against the dollar, giving up four-year highs on profit-taking amid mounting risk aversion due to geopolitical tensions in the Middle East. 

Despite the losses, the euro is heading for the second weekly profit in a row as the odds of a July European rate cut receded, while recent US inflation data boosted the odds of two Fed rate cuts this year.

The Price

The EUR/USD fell 0.6% today to $1.1511, with a session-high at $1.1614.

The euro closed 0.8% higher on Thursday against the dollar, the fourth profitt in a row, hitting a four-year peak at $1.1641 following US inflation data.

Geopolitical Tensions 

Israel launched a heavy military operation against Iran, targeting nuclear facilities and ballistic missile factories and military leaders.

The Israeli army said the operation aims at preventing Tehran from developing a nuclear weapon and described it as the start of a long-term military operation, with Israel's air space closed in preparation for Iranian responses.

The US administration started to transport some of its personnel from several Middle Eastern countries and warned from heightened security risks, while spreading  additional air defense systems to protect US military bases in the region.

Weekly Trades

The euro is 1.1% higher so far this week against the dollar, on track for the second weekly profit in a row.

ECB President Christine Lagarde hinted at the possible end of the current cycle of policy easing, which was in response to a combined shock such as the Covid 19 pandemic, the Ukrainian war, and the energy crisis.

According to a Reuters source, most ECB members now aim at holding interest rates unchanged in July, with the global markets now expecting just an additional 25 basis points of rate cuts by the end of the year. 

The odds of a 0.25% ECB rate cut in July now stood below 30%, with traders awaiting more eurozone data and remarks by ECB officials to gather more clues. 

US Rates

Recent data showed US inflation rose less than expected in May, with limited effects so far for Trump’s tariffs on prices.

Following the data, traders raised their estimates for a Federal Reserve rate cut in September.

The markets now see an 80% chance of a Fed rate cut in September, with a second cut in October.