 ▲ Middle East war, Bitcoin/ChatGPT-generated image © |
Bitcoin (BTC) has fallen to $63,000, while Ethereum (ETH) and XRP (Ripple) have also plunged sharply, pushing the cryptocurrency market back into a state of fear amid overlapping concerns of military conflict in the Middle East and a shock from U.S. inflation data.
According to cryptocurrency-focused media outlet CoinGape on February 28 (local time), the total cryptocurrency market capitalization shrank by 5.49% in 24 hours to $2.21 trillion. Bitcoin declined 5% over the same period to $63,000, Ethereum tumbled 8% to $1,800, XRP fell 7%, and Solana dropped about 10%, signaling broad weakness across major altcoins.
The immediate trigger for the sharp sell-off was news of U.S. and Israeli airstrikes on Iran. In a video message, U.S. President Donald Trump stated that the United States is conducting “large-scale and sustained” military operations against Iran and emphasized efforts to prevent the country from acquiring nuclear weapons. The U.S. has deployed substantial forces to the Middle East to increase pressure for negotiations, and the operation is reportedly expected to continue for several days. As geopolitical tensions escalated, a wave of selling in risk assets was immediately sparked across global financial markets.
Adding to the pressure, the U.S. Producer Price Index (PPI) for January 2026 came in above market expectations, dampening hopes for monetary policy easing. If inflation remains elevated, the Federal Reserve may have no choice but to remain cautious about cutting interest rates, leading to growing speculation that rate cuts could be delayed further. Following the data release, the U.S. dollar strengthened, putting additional pressure on the interest rate–sensitive cryptocurrency market.
Typically, interest rate cuts inject liquidity into the market and stimulate demand for risk assets. However, as expectations for such cuts retreated, investor sentiment cooled rapidly. The Crypto Fear & Greed Index has fallen back into the “extreme fear” zone, with investors now facing the dual burden of geopolitical risks and monetary policy uncertainty.
Market experts view the direction of developments in the Middle East, upcoming inflation data, and the path of interest rates as key variables that will determine the short-term trend. If geopolitical tensions persist or additional inflation shocks occur, further volatility in the cryptocurrency market appears unavoidable.
*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses incurred based on it. The content should be interpreted for informational purposes only.*