When news of “Operation Epic Fury” broke and reports confirmed a US-Israeli strike on Tehran on February 28, the crypto market reacted instantly.
Within an hour, digital asset traders turned the market into a fear bubble. It was not a gradual decline. Traders rushed to sell, triggering panic at full speed.
According to CryptoQuant, sellers injected nearly $1.8 billion in volume into the market in just one hour. But the real impact was felt in the derivatives market.
The Bitcoin derivatives pressure index fell from 30% to 18%, showing that bullish confidence quickly collapsed.
Many leveraged traders have been forced out, triggering what is known as a leverage purge, a chain reaction in which falling prices cause more liquidations and even more selling.
Source: CryptoQuant
So yes, prices have fallen. But risk has also been eliminated from the system.
And despite rising geopolitical tensions, the crypto market has shown surprising strength, suggesting the panic may have already done its damage.
The crypto market didn’t blink
At press time, the Crypto Fear and Greed Index stood at 14, signaling “extreme fear.” But this is actually an improvement from February 23, when it fell to the very low level of 5.
That day marked one of the sharpest collapses of confidence in recent memory.
The difference is now clear. Investors remain cautious, but last week’s blind panic has eased. This change is also visible in the numbers.
The total crypto market cap soared to $2.32 trillion, up 3.39% in just 24 hours. Bitcoin rose back above $67,114, gaining 4.34%. Ethereum (ETH) did even better, jumping 6.86% and trading above $2,000 again.
The community has confidence in Bitcoin and altcoins
Noticing the strength of Bitcoin, one in X users expressed it best when they said:
“Iran just showed the world why Bitcoin is the hardest money.”
He added,
“It doesn’t solve the war. But it removes a key weapon: the ability to trap people in a broken currency and controlled banking system.”
Additionally, discussions have also taken place around the upcoming altcoin season. Making the same point, another X user said:
“I don’t think people understand the magnitude of this setup…yet. World War III just broke out and Alts did NOT go to zero.”
This shows that the market is rotating and people are willing to slowly move their money into altcoins. He added,
“The Alts just had their first green 2-month MACD and a bullish crossover in 4 years. This will all seem so obvious when it’s too late…”
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Echoing similar sentiments, another user added:
“Altcoin dominance is also about to break out of a wedge that has been forming for several years. Even if the market doesn’t look like it yet. Good times ahead.”
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However, according to CoinMarketCap data, we are still in the Bitcoin seasonal zone.
Past reactions to war
In the past, military tensions involving Iran have often caused short-term panic on Bitcoin, but the declines did not last long. Looking back, in April 2024, Bitcoin (BTC) fell 8% overnight, but recovered within two days.
In October 2024, Bitcoin fell 3%, but recovered in a single day. In June 2025, it fell 6%, then surged 62% to new highs. But February 2026 told a different story.
This time, Bitcoin entered the strike already weakened. It had fallen 48% from its all-time high. The weekly RSI hit its lowest level on record, signaling that the market was deeply oversold.
The Fear & Greed Index remained in the fear zone for three consecutive weeks, showing that extreme fear had already taken control.
Meanwhile, traders had reduced open interest by 55% and the market had eliminated leverage over the previous five months. Simply put, most of the overleveraged positions had already been liquidated.
So when the new strike broke out, the market simply didn’t have many weak hands left to shake.
What more?
While gold and silver remained slightly positive and the S&P 500 struggled, Bitcoin held up better than expected. This suggests that most of the selling pressure may already be over.
This time, the shock did not break the market, it could have confirmed where the bottom is.
This coincided with Iran’s digital asset activity reaching around $7.78 billion in 2025 and with data showing that people were increasingly moving cryptocurrencies into their personal wallets during periods of unrest and monetary weakness.
Ergo, as global tensions continue to rise, the market is now waiting to see what happens next for crypto.
Final summary
- Bitcoin entered the conflict largely oversold, meaning much of the damage had likely been assessed in advance.
- Historical trends show that war-induced declines often reverse quickly, but this cycle began on a structurally different basis.
