Bitcoin slipped back under $70,000 Thursday morning amid reports that the Pentagon is preparing for a “final blow” in Iran.
The cryptocurrency’s recent string of higher lows faces its first major test as President Donald Trump’s five-day pause of strikes against Iran expires Friday, with Axios reporting that the U.S. military is developing options in Iran that could include the use of ground forces and a “massive bombing campaign.”
On prediction market Myriad, owned by Decrypt‘s parent company Dastan, users now place a 60% chance on U.S. boots on the ground in Iran before May—up more than 10% on the day.
Though Bitcoin has outperformed gold and U.S. stocks since the war began, the Pentagon’s reported preparations—including options for ground forces and a massive bombing campaign—signal that a further escalation is likely to increase uncertainty and impact the leading crypto’s directional bias.
Bitcoin’s higher lows since February 24—a pattern often associated with accumulation—could face invalidation. Short-term holders who bought within the last month carry a cost basis of approximately $70,200, marking the developing support floor, according to a Glassnode report. Above that, the one-to-three-month cohort sits at $82,200, reinforcing overhead resistance.
However, the accumulation cluster at $70,200 remains modest in size. “The higher probability of a breakdown below this level cannot be dismissed until a more substantial base of committed buyers is established,” the report noted.
Testing times
The $70,200 level is likely to be tested repeatedly rather than broken in one move, Tim Sun, senior researcher at Hong Kong-based crypto exchange HashKey Group, told Decrypt. While recent U.S.-Iran contact has signaled possible de-escalation, any negotiation process is unlikely to resolve quickly, and a renewed escalation cannot be ruled out.
“From the current price action, we do see some signs that stronger hands are accumulating,” Sun said. “This still looks more like defensive accumulation than confirmation of a new trend-driven rally.”
Bitcoin is trading at $69,522, down 3% over the past 24 hours, according to CoinGecko data.
Markets are already pricing in extreme uncertainty. Front-month VIX futures intraday volatility has surged to 388.2, the highest reading in at least six months, according to The Kobeissi Letter—roughly four times higher than average levels associated with market panic. Yet the S&P 500 has seen only two sessions with moves greater than 1.75% over the past three months.
When VIX—Wall Street’s fear gauge—spikes, it signals investors are paying for protection against sharp moves, even if those moves haven’t materialized yet. The current divergence suggests markets are bracing for a potential shock rather than reacting to one already unfolding.
“Futures and options markets are pricing in far more volatility than the S&P 500 is actually realizing,” The Kobeissi Letter wrote. “Uncertainty is at unprecedented levels.”
Sun said the wide gap between implied and realized volatility suggests strong hedging demand, with markets bracing for larger risk events. If those tail risks materialize, Bitcoin will be treated as a high-volatility risk asset. If they are overpriced, Bitcoin could recover quickly after short-term volatility.
For Bitcoin, the convergence of vulnerable on-chain support and macro uncertainty sets up a pivotal weekend.
A break below $70,000 “is not out of the question,” Sun warned, noting that the current rally has been driven more by leverage than sustained spot buying, making prices vulnerable to a fast pullback if sentiment reverses.
Myriad users remain split on Bitcoin’s next move, assigning a 50% chance of a retest at $84,000.
