Bitcoin Drops 7% Amid Geopolitical Tensions and Tariff Fears

In the past 72 hours, Bitcoin's bullish momentum has experienced a temporary halt due to increased bearish pressure stemming from deteriorating geopolitical conditions. As a result, Bitcoin's price has declined by 7%, failing to surpass the benchmark all-time high of $112,000. This downturn has been exacerbated by the unwinding of leveraged long positions, which has further amplified the downward momentum for top cryptocurrencies and altcoins.

Recent on-chain metrics indicate that derivative exchanges have seen significant withdrawals of stablecoins. These withdrawals, coupled with a notable divergence between Bitcoin's price and Binance's Open Interest, suggest a cautious outlook for Bitcoin in the immediate short term. The divergence between Bitcoin's price and Binance's Open Interest (OI) reveals that as Bitcoin's price approached its all-time high of $110,000, the OI did not reach peak levels. This indicates a weakening interest in futures trading despite strong long-term Bitcoin price momentum, suggesting a cautious sentiment among investors and potential shifts in market dynamics.

Global uncertainty has increased recently, affecting the financial sector, including cryptocurrencies. This uncertainty is due to Donald Trump's plans to impose unilateral tariffs in the next two weeks. Alongside the pessimism surrounding Trump’s tariffs, the escalating Israel-Iran conflict has triggered aggressive selling. The sudden spike in sell volume aligns with Israel’s unexpected military strike on Iran early Friday, which sent shockwaves through global markets. Crypto, regarded as a high-risk asset, faces immediate liquidation pressure as traders dump Bitcoin in anticipation of broader market turmoil.

According to CryptoQuant charts, over $750 million in stablecoins have been withdrawn from derivatives exchanges. This significant movement mirrors a similar withdrawal on May 29, 2025, also around $750 million. Such synchronized outflows often indicate capital rotation or changes in trader behavior. When these occur near market highs, they may signal hedging or de-risking actions. Currently, Bitcoin's price is struggling near the key psychological level of $104,000, and the recent 7% decline has made the situation more risky for market participants. Amid the geopolitical chaos, the absence of confirmation from Binance OI, along with repeated large stablecoin outflows, increases the likelihood of a short-term pullback. If the $101,000 support area is breached, Bitcoin's price could drop to the support zone around $96,000. The short-term situation urges market participants to conduct their own research and avoid making future decisions based on the fear of missing out.

Bitcoin's price is down today primarily due to escalating geopolitical tensions from Israel's military operation against Iran, alongside global uncertainty stemming from potential new tariffs proposed by Donald Trump. If the Fed keeps rates high or signals fewer future cuts, it makes riskier assets like crypto less attractive, as investors favor more stable, yield-bearing assets. Conversely, rate cuts can boost crypto appeal. Bitcoin is currently trading around $104,000. Key support levels to watch are $101,000-$102,000, and if breached, it could potentially drop to $96,000 this month due to ongoing bearish pressure.