Crypto Market Plummets 4% as US Iran Tensions Spark Selloff

The cryptocurrency market experienced a significant downturn in the past 24 hours as Bitcoin's price plummeted by over 4%, falling below $100,000 for the first time in weeks. This sharp decline was triggered by escalating tensions between the United States and Iran, with fears of a potential war causing widespread panic among investors. The market crash resulted in the liquidation of over $1 billion in crypto positions, with long positions dominating the losses. Bitcoin's price dropped to as low as $102,400, leading to a market-wide selloff that affected major altcoins as well. The total crypto market cap declined, reflecting the broader impact of geopolitical uncertainties on the digital asset landscape.

The sudden U.S. airstrike on Iran's key nuclear sites caught many traders off guard, leading to a massive selloff and the liquidation of $595 million in bullish positions. This event underscored the sensitivity of the crypto market to geopolitical risks, as investors rushed to exit their positions in anticipation of further market volatility. The fear of war continued to rise, causing the crypto market to lose value. Bitcoin, which had been trading above $104,000, dipped below this level following a 4% drop, while Ethereum and other altcoins saw even sharper declines. Analysts noted that the extreme bearish sentiment from retail investors could hint at a potential rebound, as such sentiment often precedes a market turnaround.

The conflict in the Middle East had a profound impact on the trading volume of perpetual swap contracts and funding rates, which turned negative for a slew of tracked tokens. Market-wide de-risking over fears of a worsening Iran-Israel conflict resulted in a sea of red for crypto assets over the past week. Bitcoin was down more than 4%, Ethereum more than 8%, and Solana 10%. Despite the bearish sentiment, ETH options markets carried a less bearish tilt toward out-of-the-money puts relative to BTC short-tenor options. For expirations beyond 30 days, the ETH put-call skew was positive, indicating some optimism among longer-term investors.

The liquidation of over $1 billion in crypto positions, with long positions accounting for 91%, highlighted the vulnerability of the market to sudden geopolitical shocks. The immediate drop in Bitcoin's price following the liquidation event further exacerbated the market selloff, as traders scrambled to exit their positions. The liquidation of bullish bets worth $595 million as a result of the U.S. airstrikes on Iran's nuclear facilities underscored the market's sensitivity to geopolitical risks. The fear of war continued to rise, causing the crypto market to lose value, with Bitcoin dropping to $103,127 and Ethereum and other altcoins seeing even sharper declines. Analysts noted that the extreme bearish sentiment from retail investors could hint at a potential rebound, as such sentiment often precedes a market turnaround.

According to market analysts, Bitcoin is currently testing a support zone between $100,000 and $102,000. If it manages to hold above this, there could be a temporary bounce or sideways movement. However, if Bitcoin falls below this range, the next potential support lies around $96,000 to $97,000. At the time of writing, BTC has dropped below that support. There is also weakening momentum in the larger timeframes. Several technical indicators are hinting at a possible longer correction phase or extended sideways consolidation for Bitcoin in the coming weeks or months. While minor short-term recoveries could happen, analysts predict that strong bullish moves are unlikely in the immediate future due to both technical weakness and ongoing geopolitical risks.