This is the fourth major Iran-related risk event crypto has absorbed since the conflict began, and the pattern of shrinking sell-offs continues. Earlier escalations produced sharper drawdowns in bitcoin than this one, with each successive flare-up compressing the magnitude of the crypto reaction even as oil and equities continue to price each headline fresh.

The divergence suggests crypto has largely finished pricing the geopolitical tail risk that traditional markets are still reacting to, either because holders who were going to sell on Iran headlines have already sold, or because the spot ETF bid has become a more reliable floor than the futures-driven weekend gaps that defined earlier cycles.

What traders will watch through the U.S. session is whether the 10-year Treasury yield holding near 4.27% and the dollar bid pull bitcoin lower through the risk-parity channel, or whether the equity correlation that dominated Q1 loosens on a day when the driver is explicitly geopolitical rather than macro-liquidity.

If bitcoin holds $74,000 through the European open and the Strait of Hormuz situation deteriorates further, the asset’s emerging reputation as a geopolitical shock absorber gains another data point. If the move extends below $73,000 on any incremental Iran headline, the shrinking-sell-off thesis breaks.

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(Andrei Akushevich/Getty Images)

Multiple lending and yield protocols are posting double-digit percentage declines in TVL, though token prices are seeing a limited decline.

What to know:

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