Bitcoin Drops 4% as Geopolitical Tensions Fuel Market Selloff

Bitcoin's price has plummeted below $100,000 for the first time since May 25th, marking a decline of approximately 4% within the past 24 hours. Over the last seven days, the cryptocurrency has experienced a 5.5% decrease in value. This downturn has triggered a broader selloff among altcoins, with many experiencing significant losses, resulting in nearly $1 billion worth of liquidated positions.

The market turmoil coincides with escalating geopolitical tensions in the Middle East. The US has joined the conflict between Israel and Iran, targeting three strategic nuclear sites within Iran. In retaliation, the Iranian Parliament has voted to close the Strait of Hormuz, a critical oil transit chokepoint. This move has led to an immediate increase in oil prices, which have risen by nearly 1% on the day, fueling international concerns about inflation and economic instability.

As traders react to these developments, there is a noticeable trend of derisking, with investors seeking to mitigate potential losses. The extent of this correction remains uncertain, but the current market dynamics suggest a period of heightened volatility and caution. The interplay between geopolitical events and financial markets underscores the interconnected nature of global economies and the potential impact of political decisions on financial assets.