Altcoins have given back the majority of their gains since the Iran war began. While crypto altcoins outperformed for a long stretch after the outbreak of the US war with Iran, the asset class has retraced this past week.
XRP, Solana, and Ethereum have each dropped more than 6% in the past seven days as the total market capitalization for all of crypto (including Bitcoin) has shed roughly $44 billion in the period, according to CoinGecko. Ethereum ETFs have also registered daily consecutive outflows for the past seven days, totaling more than $392.1 million.
The Iran war was at first a positioning shock that saw crypto thrive, in part because the asset class was “lightly owned,” according to Fredrick Collins, CEO of crypto analytics platform Velo.xyz. “Now as more concrete and persistent concerns about economic impacts have materialized, it’s not surprising to see crypto struggling as well,” Collins told Sherwood News. “In the face of cyclical (rather than transient) worries for risk assets in general, it’s not realistic to expect crypto to remain unscathed. And so we’ve unfortunately just not seen that initial relative strength in crypto continue to play out.”
Short term, the market likely remains flow-driven and headline-sensitive. Without a stabilization in ETF flows, a cooling in oil, or a renewed bid in equities, it’s hard to argue for a sustained bounce in alts.
Prediction market-implied odds of the cryptocurrency sliding below $1,750 are at 81%, while the probability of the token tumbling under $1,500 stands at 68%, an increase from Monday. A drop to $1,457 would liquidate about 162,870 ETH tokens’ worth of leveraged long positions, worth $323.3 million on Hyperliquid, per CoinGlass.
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