Bitcoin dropped below $78,000 during Tuesday’s Wall Street session, mirroring a decline in risk assets as renewed Middle East tensions pushed oil prices to multi-month highs and rattled global markets.
Middle East unrest triggers selloff in Bitcoin and US stocks
According to data from TradingView, BTC/USD fell to $77,600, marking its lowest level since September 3 before showing a modest recovery. This pullback coincided with similar weakness in US equity markets.
Heightened geopolitical concerns followed reports of Houthi strikes targeting Saudi Arabian cities and oil infrastructure. As the first full trading session after the Labor Day holiday began, the S&P 500 slipped 0.5% and the Nasdaq Composite Index edged down 0.4%.
Oil markets responded more dramatically. The price of West Texas Intermediate (WTI) crude surged toward $95 per barrel, the highest since June 8. Brent crude neared the $100 mark for the first time since late July.
The surge in fuel prices has also driven US diesel costs to new highs. The Kobeissi Letter, a financial research platform, stated that this pressure is “mounting inflation expectations.”
Oil prices have surged to three-month highs on the back of renewed Middle East turmoil, leading analysts such as The Kobeissi Letter to warn: “Inflation expectations continue to mount as a result.”
The Consumer Price Index (CPI), a key measure of inflation in the US, is scheduled for release on Friday, and market participants are closely monitoring its impact on macroeconomic conditions.
Amid the rising energy costs, US president Donald Trump commented on Truth Social that oil prices would drop sharply in the future and pledged to bring gasoline below $2 per gallon if his administration prevails in the ongoing conflict with Iran.
BTC technical outlook raises caution on May breakdown repeat
Market analysts highlighted concerns that Bitcoin’s current price action could echo its failed breakout in May. At that time, BTC/USD briefly touched $82,800 before reversing, consolidating at $78,300, and then falling to new macro lows near $57,000.
Rekt Capital, a widely followed trader and analyst, pointed to a critical retest of the $78,300 level. In a post on X, he stated that this is a key support zone, warning that a failure to hold it could cement another lower high and leave the 2026 bear market intact.
If Bitcoin closes the week below $78,300 and follows with a bearish retest, analysts believe this could confirm a further breakdown, similar to the price decline that occurred after May’s failed rally.
The analysis suggests that unless Bitcoin reclaims and sustains higher levels, risks to the downside remain elevated in the short term.
If the current price zone fails, Bitcoin could register another lower high since October 2025, keeping the 2026 bear market trajectory in place.
Traders are now monitoring both geopolitical developments and key technical levels for signals of Bitcoin’s next major move.
Mini dictionary: The Kobeissi Letter is a financial market research and commentary platform known for its analysis of macroeconomic trends, commodities, and risk assets.
| Asset | Latest Value | Movement |
|---|---|---|
| Bitcoin (BTC) | $77,600 | Lowest since Sept. 3, fell below $78,000 |
| WTI Crude Oil | $95 per barrel | Highest since June 8, up strongly |
| S&P 500 | Down 0.5% | Fell on risk-off mood |
| Nasdaq Composite | Down 0.4% | Reacted to geopolitical tensions |
