Bitcoin Drops 5.3% Amid Geopolitical Tensions

Bitcoin's price experienced a significant decline, falling below $103,000 after reaching a high of $110,450 on Monday. The cryptocurrency saw a 5.3% drop from its intra-day peak of $108,450 to a low of $102,664 before recovering slightly to around $104,456 by the time of reporting. This sell-off coincided with Israel's large-scale air-strikes on Iranian nuclear installations, which sent shockwaves through global markets.

The geopolitical tensions triggered a repricing of global risk, with oil futures surging over 10%, spot gold hitting a new record high above $3,400 an ounce, and US equity futures dropping by approximately 1.5%. Bitcoin's reaction mirrored its response to Iran's failed missile attack on Israel in April, where it initially declined but later outperformed other assets.

Analysts noted that Bitcoin's price often dips during significant geopolitical events, but this volatility can drive more people to invest in cryptocurrencies due to their 24/7 trading nature. The flight to safety trade was evident as crude oil, natural gas, gold, and US Treasuries spiked higher, while Bitcoin, along with the S&P 500 and Nasdaq, were panic-sold.

The surge in crude oil prices, with West Texas Intermediate exceeding $77 a barrel, posed a challenge for US policymakers. This increase threatened to reverse the disinflation trends that had been taking hold, potentially leading to a rebound in headline inflation. The Federal Reserve might feel compelled to delay the anticipated rate-cut cycle if energy prices continue to rise, impacting Bitcoin's performance due to its sensitivity to global liquidity conditions.

Recent inflation data showed that May's Consumer Price Index rose by 0.1% month-over-month and 2.4% year-over-year, while core CPI matched the modest 0.1% gain and held at 2.8% annually. Producer prices also indicated a similar trend, with the headline PPI up by 0.1% month-over-month and 2.6% year-over-year, both below consensus expectations. Lower fuel costs had been a key factor in President Trump's strategy to control inflation, but the recent oil price surge threatens this narrative.

The geopolitical newsflow led to one of the heaviest forced-liquidation events of 2025, with approximately $1.14 billion in crypto futures positions wiped out over the past 24 hours. The majority of these liquidations, around $1.04 billion, were long positions, affecting 236,788 traders. The largest single liquidation was a $201 million BTC-USDT long on Binance, marking the biggest one-ticket liquidation since January. For Bitcoin, long-side liquidations totaled $443 million, making it the worst wipe-out since the post-tariff rout of February 3, when $1.25 billion was liquidated across the crypto market.