# Four Possible Directions of the Iran War: Who’s Panicking in Crypto? Who’s Running Ahead? — A Scenario Analysis from Oil Prices to Token Prices You Can’t Ignore

Recently, market conditions have been tough, and I believe everyone can feel it. The US and Israel have been jointly targeting Iran for nearly a month now, with the Strait of Hormuz semi-blocked, oil prices soaring, and the fear/greed index hitting the max—driving the entire market by geopolitical tensions.

Today, BTC dropped to around 66,300, ETH back to 1,986, and the Fear & Greed Index fell to 10—"Extreme Fear." Emotions aside, trading cannot rely on feelings; it’s about probabilities. In this article, I break down the war into four possible scenarios, analyze their impact on the crypto market, and finally share my judgment and position strategy. Feel free to discuss.

## 1. Four War Scenarios

**Scenario A: Airstrikes + Limited Naval Blockade (Probability 40-55%)**

Currently happening—US and Israel are conducting air strikes and missile attacks on Iranian military targets. The US has precisely hit over 90 military targets on Kharg Island. The Strait of Hormuz is in a "semi-blockade." This is the lowest-cost, least-resisted baseline path.

**Scenario B: Special Forces Targeted Raids (Probability 20-30%)**

The White House says ground troops are "not currently planned" but "not ruling out any options." When air strikes can’t fully destroy nuclear facilities, small-scale ground raids are a common escalation tactic for the US military.

**Scenario C: Limited Ground Invasion — Seizing Kharg Island or Key Strait Points (Probability 15-25%)**

US forces already launched a large-scale attack on Kharg Island on March 14, currently "holding" the oil facilities. But Iran’s parliament warns: if the US and Israel attack any Persian Gulf islands, Iran will "abandon all restraint." The conflict remains deadlocked; landing and controlling key islands is not impossible.

**Scenario D: Full-Scale Ground Invasion (Probability 5-15%)**

A level similar to Iraq 2.0. All parties want to avoid this, but after three weeks of war, Iran’s missiles have twice penetrated Israeli air defenses, and the conflict is escalating rather than de-escalating. The lowest probability, but cannot be ruled out.

## 2. The Strait of Hormuz — Why Should Crypto Care About a Strait?

About 20% of the world’s oil and over 30% of LNG shipping pass through Hormuz. Iran’s Revolutionary Guard has declared the strait under "full surveillance," and US and Israeli oil tankers are banned from passage. Insurance costs have skyrocketed, and shipping is effectively paralyzed.

The transmission chain is clear: **Oil prices surge → Inflation expectations rise → Fed delays rate cuts → Global risk assets come under pressure → Crypto markets suffer.** This is the core logic of how war impacts the crypto market.

Currently, market pricing reflects: partial blockade (50-60%), near-complete blockade (20-30%), total shipping halt (5-15%). Oil prices already include an estimated geopolitical premium of about $8-10 per barrel.

## 3. How Will Crypto Markets Move Under These Four Scenarios?

**Scenarios A/B — The Most Likely Path Now:**

On the day the war started (Feb 28), BTC dropped from 65,500 to 63,000, with over $100 million long positions liquidated in 15 minutes. Afterwards, it showed resilience, rebounding to around 71,000, outperforming gold and most traditional assets. But don’t be fooled by that rebound—BTC has now fallen back to 66,300, ETH to 1,986, and the war risk is far from fully priced in.

Worth noting: since March, US spot BTC ETF has seen over $1.5 billion net inflow. Institutional funds aren’t fleeing in panic—they’re accumulating. Many put options have been closed out, and market makers are forced to buy BTC to hedge, providing price support.

In scenarios A/B, BTC is likely to fluctuate broadly between 60,000 and 72,000. Altcoins are much worse off, with liquidity drying up and prices falling sharply, slow to recover.

**Scenario C — Oil Prices Break $100, Triggering Another Wave of Panic:**

If US troops land and seize key points in the strait, oil could spike to $100–130, further boosting inflation expectations and prompting the Fed to signal a more hawkish stance. Crypto markets could see even more intense sell-offs than on Feb 28, with BTC possibly briefly dropping below 60,000.

But the key is what happens *after*. Historical cases: In June 2025, Israel’s airstrike on Iran saw BTC fall from 110,000 to 103,000, then rally 62% over two months to new highs; in April 2024, Iran missile attacks on Israel caused BTC to drop to 61,000 before hitting new highs again. Geopolitical panic often marks mid-term bottoms.

Another logic point: Arthur Hayes notes that since 1985, whenever the US fights in the Middle East, the Fed responds by cutting rates and expanding balance sheets. The higher the war costs, the more likely they are to flood the market. Everyone understands what that means for crypto.

**Scenario D — The Black Swan:**

Global stagflation ensues, all risk assets are sold off systematically, and BTC could fall to 55,000 or lower, with altcoins and leveraged positions wiped out. But if the dollar is eroded by war-related fiscal spending and long-term inflation, the narrative of Bitcoin as "digital gold" could gain stronger support. The path would be very tough, though.

## 4. My Judgment and Positioning Strategy

Core idea: **The overall trend is "fall first, then recover."**

How much it falls depends on how the war develops. In scenarios A/B, the bottom is likely around 60,000–63,000; in C/D, deeper drops are possible. But regardless of the scenario, after the black swan shocks are absorbed, the market will ultimately rebound and recover.

Three reasons: First, war pushes inflation higher → forces easing → benefits crypto; second, BTC ETF institutionalization is irreversible—$1.5 billion net inflow in March shows smart money is accumulating; third, the fear index is at 10—the lowest since October 2025—historically, extreme fear often marks mid-term bottoms.

**Operational suggestions (for reference):**

- Reduce futures leverage to very low levels; preserving capital is more important than making money.
- Clear out altcoins; during geopolitical conflicts, institutions mainly recognize BTC and ETH.
- Accumulate BTC spot gradually; don’t chase rallies—buy on panic dips.
- Keep enough cash on hand; if scenarios C/D unfold, having ammo allows you to bottom-fish.

In the end, no one can predict the war’s course, but we can control our positions. Multiply the probabilities of each scenario by your holdings to estimate the worst-case loss. If that number keeps you awake, adjust now.

Fear isn’t a reason not to buy—*as long as* you buy in a way that even if prices drop another 30%, you won’t be wiped out or panic.

The market is always there. Manage your risks, endure the storm, and opportunity will come. Let’s stay together.

*This is just personal reflection and not investment advice. Market volatility is high—please assess based on your own situation.*