When news of ‘Operation Epic Fury’ broke and reports confirmed a US-Israeli attack on Tehran on February 28, the crypto market reacted immediately.
Within an hour, digital asset traders turned the market into a fear bubble. This was not a gradual decline. Traders rushed to sell, causing panic at full speed.
According to CryptoQuant, sellers pumped nearly $1.8 billion in volume through the market in just one hour. But the real impact manifested itself in the derivatives market.
The Bitcoin Derivatives Pressure Index fell from 30% to 18%, showing that bullish confidence quickly collapsed.
Many leveraged traders were forced This leads to what is known as a ‘leverage purge’, a chain reaction in which falling prices cause more liquidations and even more sales.
Source: CryptoQuant
So yes, prices fell. But the risk was also flushed out of the system.
And despite rising geopolitical tensions, the crypto market has shown surprising strength, suggesting that the panic has already done its damage.
The crypto market didn’t blink
At the time of writing, it was the Crypto Fear and Greed Index to stand at age 14, which indicated “extreme anxiety.” But this is actually an improvement from February 23, when it fell to a very low level of 5.
That day marked one of the sharpest collapses in market confidence in recent history.
The difference is now clear. Investors are still cautious, but last week’s blind panic has subsided. This change is also visible in the figures.
The total crypto market capitalization has climbed to $2.32 trillion, an increase of 3.39% in just 24 hours. Bitcoin has moved back above $67,114, with a gain of 4.34%. Ethereum [ETH] has done even better, jump 6.86% and is trading above $2,000 again.
The community has confidence in Bitcoin and altcoins
A user on said,
“Iran just showed the world why Bitcoin is the hardest money.”
He added:
“It doesn’t solve the war. But it does remove an important weapon: the ability to keep people trapped in a broken currency and a controlled banking system.”
In addition, there have also been discussions about the upcoming altcoin season. To remark on the same another X user said:
“I don’t think people understand the magnitude of this setup…but World War II just broke out and Alts has NOT gone to zero.”
This shows that the market is turning and people are willing to slowly move their money into altcoins. He added:
“Alts just had the first green MACD of two months and a bullish crossover in four years. It will all seem so obvious when it’s too late…”
Source:
Echoing similar sentiments, another user added,
“Altcoin’s 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 this yet, good times lie ahead.”
Source:
However, according to facts from CoinMarketCap, we are still in the Bitcoin seasonal zone.
Past reactions to war
In the past, there have often been military tensions involving Iran causes short-term panic in Bitcoin, but the decline 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 within one day. In June 2025, rates fell 6% and then rose 62% to new highs. But February 2026 told a different story.
This time, Bitcoin entered the attack already weakened. It was down 48% from its all-time high. The Weekly RSI reached an all-time low, indicating that the market was deeply oversold.
The Fear & Greed Index remained in the fear zone for three weeks straight, showing that extreme anxiety had already taken control.
Meanwhile, traders had cut Open Interest by 55%, and the market had wiped out leverage over the past five months. Simply put, most of the over-indebted positions were already gone.
So when the new strike hit, the market simply didn’t have many weak hands left to shake out.
What’s more?
While gold and silver remained slightly positive and the S&P 500 struggledBitcoin held up better than expected. This suggests that most of the selling pressure has already passed.
This time the shock did not break the market, but might have confirmed where the bottom lies.
This coincided with Iran’s digital asset activity reaching approximately $7.78 billion in 2025, and data shows that people increasingly put cryptocurrencies into personal wallets during periods of unrest and currency weakness.
Ergo, as global tensions continue to rise, the market is now waiting to see what happens next with crypto.
Final summary
- Bitcoin got deep into the conflict, meaning much of the damage was likely priced in ahead of time.
- Historical patterns show that war-induced dips often reverse quickly, but this cycle began from a structurally different base.