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▲ Bitcoin lost its direction and fell into chaos / AI-generated image ©
Amidst the tension of the calm before the storm engulfing the global asset market, the virtual asset market, which had been rising relentlessly, paused for breath along with the New York stock market, due to Middle East peace negotiations shrouded in mystery and overlapping hawkish monetary policy concerns.
According to data from CoinMarketCap, a global cryptocurrency market data aggregator, as of 6:17 AM on the 22nd, Bitcoin (BTC) is trading at $75,595, down 0.59% from 24 hours ago, showing a slight bearish trend. Ethereum (ETH), the leading altcoin, also recorded $2,313.63, down 0.56%, and top market cap cryptocurrencies XRP (Ripple) and Solana (SOL) also fell together, down 0.34% to $1.42 and 0.64% to $85.28, respectively. The total virtual asset market capitalization decreased by 0.52% to approximately $2.55 trillion, and the Fear & Greed Index recorded 55, indicating neutral investor sentiment.
This downward pressure in the crypto market aligns with the decline in the New York stock market overnight. On the 21st (local time), the Dow Jones Industrial Average, S&P 500, and Nasdaq indices all closed down, falling between 0.59% and 0.63% together. The Volatility Index (VIX), also known as the “fear index,” rose 3.34% from the previous trading day to 19.50, closely approaching 20, the benchmark for market instability. Despite strong first-quarter earnings from major companies, the second round of peace talks between the US and Iran faced a crisis ahead of the ceasefire's end, pushing investor risk aversion to an extreme.
Although the ceasefire's expiration was imminent, negotiators from both countries had not even departed for Islamabad, Pakistan, the meeting venue, escalating tensions. As the US seized an Iran-linked vessel and President Donald Trump issued strong remarks threatening bombing if an agreement failed, Brent crude surged to $98.48, and West Texas Intermediate (WTI) crude jumped to $89.67. Even after the market close, despite President Trump announcing a temporary halt to attacks and an extension of the ceasefire due to Pakistan's mediation and internal divisions in Iran, Iran announced its non-participation in the second round of talks, leaving deep market uncertainty unresolved.
Furthermore, hawkish remarks by Federal Reserve (Fed) Chairman nominee Kevin Warsh during his hearing further heightened market vigilance. When he declared that he would uphold the central bank's independence without succumbing to presidential pressure for interest rate cuts, 10-year US Treasury yields jumped to 4.29%, and 2-year yields rose to 3.78% across the board. This rise in Treasury yields even caused spot gold prices to plummet by 3.0% to $4,677.24, and is exerting structural selling pressure across the entire virtual asset market, including non-interest-bearing Bitcoin.
For the time being, the fate of the cryptocurrency market is expected to be strictly dependent on whether a breakthrough is found in geopolitical risks shrouded in uncertainty and on the Fed's interest rate direction. While there are positive views on fundamentals, with major financial institutions like JPMorgan Chase raising their stock index targets to 7,600 based on strong performance in the AI and technology sectors, until the two major axes of macroeconomic uncertainty—fear of war and concerns about prolonged high interest rates—are resolved, virtual asset investors should focus on thorough risk management rather than making premature directional bets.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. This content should be interpreted for informational purposes only.*
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