It was less than a week ago when bitcoin was riding high, trading at a six-week peak at $76,000. It had recovered $13,000 since the war in the Middle East began, and was the best performing asset during this time of new uncertainty (aside from oil, perhaps).
However, the subsequent rejection was quite painful, especially over the past 24 hours, and bitcoin found itself dropping toward $68,000 earlier today. As such, it had lost $8,000 in mere days, and here are some of the possible reasons.
Fed’s (Lack of) Changes
Although essentially all investors and experts were expecting no changes to the key interest rates in the US from the Federal Reserve during its second meeting of the year, Chair Powell’s hawkish speech after the event brought some more pain for risk-on assets like crypto.
After his second-to-last FOMC meeting, the current Chair said the central bank remains concerned about stubbornly elevated inflation, especially since the war in the Middle East pushed oil prices up by double digits.
“The rate forecast is conditional on the performance of the economy, so if we don’t see that progress, then you won’t see the rate cut,” Powell said.
“FOMC events act as volatility catalysts, but their impact depends on the underlying risk regime,” stated Swissblock on Thursday, adding, “In high-risk environments, FOMC days tend to trigger rejection or accelerate downside.”
According to predictions markets as well as some futures-implied products focused on the Fed’s policies, the interest rate cuts will be paused for over a year. The Kobeissi Letter, in a post from today, outlined the significance of such a potential development, if true, of course.
Talk about a turn of events:
The futures-implied BASE CASE now shows the Fed pausing interest rate cuts until July 2027.
To put this into perspective, the debate in late-2025 was whether the Fed would CUT rates 3 or 4 times in 2026.
Last week, markets briefly showed a 50%…
— The Kobeissi Letter (@KobeissiLetter) March 21, 2026
The War Itself
Obviously, the ongoing and quickly escalating tension in the Middle East is another major reason behind BTC’s recent correction. This was more than evident on Sunday morning when the cryptocurrency fell by a few grand in minutes after US President Trump threatened to ‘obliterate’ Iran’s power plants if the country doesn’t safely reopen the Strait of Hormuz.
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The POTUS gave his enemy 48 hours to allow ships to pass through the key region; otherwise, they will experience another wave of countless attacks.
ETF Reversal
The spot Bitcoin ETFs enjoyed a healthy streak of seven consecutive days in the green, from March 9 to March 17. Its price peak at $76,000 came just as the inflows tapped $200 million on Tuesday, but the three days that followed were quite the opposite.
Investors pulled out $163.52 million on Wednesday, another $90.19 million on Thursday, and $52.11 million on Friday. Although the week ended with a net positive of $95.18 million, the last three trading days saw more than $300 million being pulled out, which coincided with the asset’s price correction.
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