Bitcoin has fallen sharply as the specter of a new military escalation in the Middle East shakes global markets. After reports of possible US and Israeli strikes against Iran, investors fled risky assets, triggering a wave of selling in cryptos and massive liquidations on derivatives markets. Between the fall of BTC, the surge in oil prices and renewed geopolitical tension, the crypto market is plunging back into a climate of strong instability.
In brief
- Bitcoin fell as low as $77,614 after growing tensions between the United States, Israel and Iran.
- Investors massively reduced their exposure to risky assets, causing a sharp correction in the crypto market.
- More than $40 billion in capitalization was wiped out while oil rose above $105 per barrel.
- Derivatives markets suffered a wave of liquidations with nearly $700 million in positions wiped out in 24 hours.
Bitcoin stalls after tensions around Iran
Bitcoin plunged to $77,614 before attempting a fragile rebound around $78,000. A few days earlier, the market celebrated a return above $82,000. This sudden correction comes after revelations from the New York Times saying the United States and Israel would consider further military operations against Iran.
Tehran reacted quickly, promising to respond severely to any aggression. Thus, investors reduced their exposure to assets considered speculative, causing a sharp decline in the crypto market.
Some figures illustrate the extent of the movement:
- Bitcoin bottomed at $77,614;
- BTC was trading above $82,000 on May 14;
- More than $40 billion in capitalization has been wiped out;
- The total valuation of bitcoin has fallen to around $1.56 trillion;
- Brent and WTI exceeded $105 per barrel.
This rise in the price of oil fuels fears of a return of global inflationary pressures, even though investors are already monitoring American monetary policies and developments in the conflict in the Middle East.
Crypto derivatives markets undergo massive purge
This fall mainly materialized on derivatives platforms. Indeed, nearly $700 million in leveraged positions were liquidated in 24 hours, including approximately $666 million in long positions.
This cascade of liquidations accelerated the market decline by automatically forcing the closure of many bullish positions. Thus, altcoins suffered the same shock, with a fall of 10.5% for HYPE, while ZEC and LINK each lost 6.4%. XRP also fell 4% to around $1.41.
This sequence once again illustrates the fragility of the crypto markets in the face of global geopolitical events. Contrary to the narrative sometimes put forward of a bitcoin acting as a safe haven, investors here favored a classic defensive logic by reducing their exposure to risk. The observed movement also recalls the growing weight of derivatives markets in the volatility of the crypto sector, where automatic liquidations often amplify corrections well beyond the initial movement.
The next few hours could now become decisive for the markets. A worsening of tensions between Washington, Tel Aviv and Tehran could fuel a new wave of risk aversion on speculative assets. Conversely, diplomatic appeasement could provide favorable ground for a technical rebound in bitcoin after this brutal correction. For crypto investors, the market has in any case reminded us that it remains closely connected to the major global geopolitical balances.
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