Cryptocurrencies fall amid escalating tensions between the United States and Iran.

• Bitcoin retreats amid risk of US-Iran conflict.
• Crypto market loses $2,22 trillion in value.
• The fall in the USDT indicates a contraction in liquidity.

The cryptocurrency market is facing one of the most pressured periods in recent years, as rising geopolitical tensions between the United States and Iran increase risk aversion among investors. This movement has led the sector's Fear and Greed Index to fall to 5 points, classifying sentiment as "extreme fear".

Readings at this level are rare and historically associated with periods of intense stress, such as the pandemic-induced drop in 2020 and the lows of the downturn recorded in 2022. The indicator reflects a widespread defensive stance in the face of the possibility of military escalation in the Middle East.

Pressure on prices also intensified. Bitcoin broke through relevant technical levels and began trading below its 50-day moving average, signaling weakening short-term momentum. In aggregate, the total value of the cryptocurrency market has already fallen by more than US$2,22 trillion, a devaluation of over 50% from its recent peak.

Data from the Polymarket forecasting market shows an increase in bets on a possible US military action in early March. The odds have been gradually rising, suggesting that some of the geopolitical risk is already being priced into assets.

Amid the sharp correction, widely publicized analyses warn of the magnitude of the movement. One of the assessments highlighted that

⚠️ CRYPTO MAY BE HEADING TOWARD ITS LARGEST CRASH EVER

The magnitude of losses now places this selloff among the most severe events in market history.

Over $2.22 TRILLION has already been erased, sending crypto down more than 50% from its peak.

"Cryptocurrencies may be heading for their biggest crash of all time."

noting that the current contraction already represents the second largest loss in nominal terms in the sector's history.

Despite deteriorating sentiment, liquidity data paints a more complex picture. The supply of the stablecoin Tether (USDT) has fallen by more than $3 billion in the last 60 days, indicating capital outflow from the market.

Similar movements were observed during previous stress events, including the collapse of FTX. However, in past cycles, the contraction of liquidity in stablecoins also coincided with advanced correction phases, close to the low points.

The combination of capitulation sentiment, significant value losses, and reduced liquidity suggests that the market is already pricing in extreme scenarios. At the same time, the evolving geopolitical landscape remains one of the main short-term factors influencing cryptocurrency price movements.