Analysis of Bitcoin price fluctuations before and after the outbreak of the Russia-Ukraine war

Using the 2022 Russia-Ukraine war as a sample, the price of Bitcoin experienced significant fluctuations within 15 days before and after the outbreak of the war. During the 7 days before the war (from February 17, 2022), the BTC/USD price fluctuated around $40,000; as the geopolitical situation worsened, the price of Bitcoin declined from February 17 to 23.

On the day of the official outbreak of war (February 24), the market experienced panic selling, with Bitcoin briefly plunging about 7%-8% intraday: the price dropped from around $37,000 to an intraday low of about $34,459. This decline reflects investors' risk-averse sentiment during the outbreak of military conflict, as Bitcoin was still viewed as a high-risk asset and faced selling pressure. However, it is noteworthy that Bitcoin quickly stabilized that day and recovered most of its losses: the closing price on February 24 was slightly higher than the previous day, with an intraday increase of about 1.7%. This shows that although the war news triggered an instantaneous plunge, Bitcoin displayed resilience, and there was no significant drop in the daily close.

In the 4-5 days following the outbreak of war, Bitcoin experienced a rapid rebound. As initial panic subsided, market trading dynamics shifted: on February 28, Bitcoin surged about 14.5% in a single day, marking the largest single-day increase in nearly a year. This date coincided with the West's intensified economic sanctions against Russia and the collapse of the ruble exchange rate, leading to market speculation that some Russian capital might use Bitcoin to evade sanctions, boosting demand for Bitcoin. As of the close on February 28, Bitcoin's price had net increased by approximately 12% compared to just before the outbreak of war (February 23). The price briefly broke through the $45,000 mark, rebounding about 20% from the pre-war low.

Subsequently, in the week following the war, Bitcoin's upward momentum slowed but remained stronger than pre-war levels: as of the close on March 3, it was about $42,550, an increase of approximately 14% from February 23. Overall, from 7 days before the war to 7 days after (February 17 to March 3), the price of Bitcoin first fell and then rose, roughly displaying a 'V' shape: initially dropping from around $40,500 to a low of approximately $34,500 (a drop of about 15%), then quickly rebounding to over $44,000 (an increase of nearly 30%). The price volatility within the 15-day window approached 25%-30%, indicating the significant impact of geopolitical conflict on short-term fluctuations in the crypto market.

4-hour level price fluctuation details

From a 4-hour perspective, the week of the outbreak of the Russia-Ukraine war showed high volatility and amplitude in the Bitcoin market. In the initial few 4-hour periods following the announcement of the war, the sharp drop and rapid rebound of Bitcoin's price were particularly evident. For example, on the early morning of February 24 (Moscow time), when Putin announced a special military operation against Ukraine, the BTC price quickly plummeted, briefly falling below the $35,000 mark within hours.

Subsequently, as investors digested the news, the market saw buying on dips, and Bitcoin continuously rebounded during several 4-hour candlesticks throughout the day, showing an increase of nearly 10% from the intraday low. For the remainder of the week, the 4-hour chart showed significant price fluctuations: initially oscillating widely between the $36,000 and $39,000 range, followed by a breakthrough of the psychological barrier at $40,000. This 'rollercoaster' market indicates that the outbreak of war has made short-term trading sentiment for Bitcoin extremely unstable, with every piece of news potentially triggering severe volatility.

Short-term bullish and bearish sentiments are fluctuating, and market volatility has significantly increased.

Inferences on the impact of the Israel-Iran conflict

Based on the aforementioned market performance of Bitcoin during the Russia-Ukraine war, preliminary inferences can be made about the potential short-term impacts of the ongoing Israel-Iran conflict.

First, it is worth noting that the market response has been relatively restrained so far: following Israel's airstrike on Iran in mid-June 2025, Bitcoin's price only experienced a brief decline and quickly stabilized and rebounded, maintaining overall stability.

However, if the situation between Israel and Iran escalates into a larger-scale war, Bitcoin is likely to experience shocks similar to those during the early stages of the Russia-Ukraine war in the short term. On one hand, the outbreak of war will lead to a sharp decline in global investors' risk appetite, and Bitcoin, as a risk asset, may see a rapid decline. For example, historically significant armed conflicts often trigger a surge of risk-averse funds into traditional assets like gold and U.S. Treasuries, while Bitcoin tends to decline alongside the stock market in the initial days. It can be expected that if the Middle East situation worsens, Bitcoin's price may first test key support levels, with the extent of the drop depending on the level of market panic (referencing previous cases of about 5%-10% intraday declines).

On the other hand, the potential bullish factors of war for Bitcoin cannot be ignored. As seen during the Russia-Ukraine conflict, once the initial panic subsides, geopolitical turmoil may generate local demand and safe-haven buying, supporting Bitcoin's price rebound. Taking the Israel-Iran conflict as an example, if the situation escalates, there may be: capital flowing into cryptocurrencies in the Middle East to avoid currency devaluation or cross-border controls; Iran and other countries seeking to bypass financial restrictions through Bitcoin under international sanctions; global investors anticipating that the war will drive up inflation and commodity prices, thus viewing Bitcoin as an anti-inflation 'digital gold' investment. These factors may provide support for Bitcoin a few days after the outbreak of the conflict.

In other words, after sharp fluctuations in the short term, Bitcoin may experience a bottom rebound, similar to the pattern of first falling and then rising during the 2022 Russia-Ukraine war.

In summary, current analysis suggests that in the event of war between Israel and Iran, Bitcoin is likely to experience notable volatility in the short term: initially, it may drop due to panic sentiment, but as long as the systemic risks caused by the conflict remain controllable, Bitcoin's price has the opportunity to rebound driven by safe-haven demand and specific capital flows.

Finally, the medium- to long-term value of Bitcoin is driven more by macro and intrinsic factors; although price fluctuations caused by military conflicts may be severe in the short term, they often do not alter long-term trends. Therefore, the market impact of the Israel-Iran conflict needs to be viewed dialectically, paying attention to short-term shocks while also looking ahead to longer-term trend developments.