According to The Block's crypto price page, bitcoin (BTC) fell 2.6% over the past 24 hours to $71,093 as of 9:28 p.m. ET on Sunday. The cryptocurrency dropped to a low of around $70,600 earlier in the day.

Meanwhile, Ethereum slid 3.6% to $2,202, XRP dipped 2% to $1.33, and Solana fell 3.25% to $82. The GMCI 30 index, which tracks the performance of the top 30 cryptocurrencies, was down 2.5% in the past 24 hours.

"Geopolitical headlines dominated crypto markets today as U.S.-Iran peace talks in Islamabad collapsed after 21 hours, triggering a sharp risk-off move," said BTC Markets Crypto Analyst Rachael Lucas.

Despite 21 hours of negotiations in Islamabad, U.S. and Iranian officials failed to resolve the protracted war. U.S. Vice President JD Vance said on Sunday that Iranian representatives were unwilling to accept U.S. terms. In contrast, Iran's state media said the talks collapsed due to "unreasonable demands" from the U.S.

While President Donald Trump's two-week ceasefire announcement prompted crypto and other risk assets to rally last week, investors remained cautious, as a full peace deal would likely require one party to make the difficult choice of softening its stance.

Crypto prices were further impacted after Trump announced that he ordered the naval blockade of the Strait of Hormuz, in a move to pressure Iran, which has been blocking the critical oil chokepoint and charging tolls of up to $2 million per vessel. This move risks further escalation of the conflict in the Middle East.

Constructive underneath

"Despite the short-term volatility, the underlying institutional picture remains constructive," Lucas said.

The BTC Markets analyst noted that spot bitcoin exchange-traded funds reported their strongest weekly inflows since February, with $786 million in inflows last week. While BlackRock's IBIT led positive flows, Morgan Stanley's newly launched MSBT attracted a notable $46 million in inflows by offering the lowest fees among the funds.

Bitcoin is currently testing a support range between $70,500 and $71,000, the analyst said, with $72,000 to $73,000 as the next resistance level.

"A reclaim of that zone on sustained ETF inflows would be a meaningful signal," Lucas added.

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