The Bitcoin price took a major leg lower in January, but has stabilized in February and has been trading mostly sideways within a range of $63,000 to $73,000.

The price is trading around key support/resistance at the $69,000 level. It is below all key EMAs, but rallied last week to test the 50-day EMA before being turned lower. The RSI was oversold in early February, but has climbed to 44 with plenty of room to continue rallying higher.

Bitcoin continues to track closely with technology stocks, but there have been some days of divergence recently, around the start of the Iran war. Small signs that maybe Bitcoin can act as a safe-haven during times of turmoil, which I would expect from a scarce asset with core technology that can’t be easily manipulated.

But if stocks correct sharply this week, the prevailing trend of correlation will likely prevail and drag the crypto sector lower. Given this outlook, I think it makes sense to take some profits off the table, reduce exposure, and preserve capital to be deployed on any major correction.

Last month I said, “absent any major Black Swans, we have likely seen the bottom.” But a major Black Swan has, unfortunately, appeared via the United States and Israel attacking Iran, and the Iranians responding effectively. I fear this could escalate further and drag on much longer than most have anticipated. Given this outlook and the lack of response from stocks thus far, I think we have an opportunity to reduce risk and get out of the way with some portion of our portfolio before the US markets open tomorrow.

Takeaway: Caution is warranted as the war with Iran looks unlikely to be quick and has already disrupted global energy markets. China and Russia are already providing support to Iran, NATO allies of the US have halted trade with the US and refused use of their bases for attacks, and there are already talks of boots on the ground and a potential draft in the U.S. This is a dangerous war that could expand around the region and even lead to the use of nuclear weapons. I am hoping cooler heads prevail, but from an investment perspective, I think it is a smart move to reduce risk and take a more cautious approach in the near term. This could be as simple as moving from speculative tokens to stablecoins for some or taking more drastic moves for others. It all depends on your individual situation and assessment of the risks from this war.