Bitcoin Plummets 10% to $99,000 on Geopolitical Tensions

Bitcoin's price experienced a significant drop below $100,000 over the weekend due to heightened geopolitical tensions stemming from the conflict between Israel and Iran. This decline was a result of the market's sensitivity to global events, which caused a temporary sell-off in the cryptocurrency. The price plummeted to approximately $99,000, testing support levels just above the Short-Term Holder Cost Basis at $98,200. This sudden decline was swiftly reversed, with Bitcoin rebounding to $106,000 following headlines indicating a de-escalation of tensions on Tuesday. The market has since returned to its familiar range of $100,000 to $110,000, where it has been consolidating since early May. This price action reflects the ongoing uncertainty and headline-driven volatility that has characterized the market in recent weeks.

The sharp price swings over the weekend triggered heightened volatility in the futures market, with liquidations spiking to $28.6 million for longs and $25.2 million for shorts within a 24-hour period. This dual-sided flush reflects how quickly sentiment flipped as the market reacted to headlines. At the same time, BTC-denominated open interest dropped from 360,000 BTC to 334,000 BTC, a decline of approximately 7%, highlighting that leveraged traders were caught off guard in both directions. The sharp reduction in open interest suggests a temporary clearing of speculative excess, resetting positioning in the derivatives market.

Despite the market reclaiming the $100,000 to $110,000 range, signs of diminishing profitability and sluggish on-chain activity are becoming more apparent. These trends are typical in choppy consolidation phases, where volatility fades and investor engagement cools. Until there is a pickup in profitability and activity metrics, the likelihood of a breakout to new all-time highs remains limited. For now, the market appears to be digesting prior gains, awaiting fresh momentum and an influx of new demand.

To assess the profitability of investors, we examine the 30-day moving average of realized profit alongside the cumulative realized profit in both the 2020–2022 and current bull markets. This comparison highlights how capital rotation has evolved across cycles. During the 2020–2022 market, Bitcoin investors realized around $550 billion in profit across multiple rallies, including two major waves. In the current cycle, realized profit has already reached $650 billion, surpassing the previous cycle’s sum total. Currently, the market appears to be in a cool-down phase after the third significant wave of profit-taking, indicating that while large gains have been secured, momentum is now easing as realized profitability tapers off.

A similar cooling pattern is evident across key activity metrics. The 7-day moving average of on-chain transfer volume has dropped approximately 32%, from a peak of $76 billion in late May to $52 billion over the recent weekend. Unlike the all-time high rallies in the second and fourth quarters of 2024, the recent push to $111,000 was not accompanied by a surge in spot volume. Current spot volume sits at $7.7 billion, significantly lower than the cyclical peaks observed earlier in this bull market. This divergence further underscores the lack of speculative intensity, highlighting the market’s hesitancy and reinforcing the consolidation narrative.

Meanwhile, the futures market volume has also been undergoing a multi-week cooldown, consistent with broader market fatigue. However, unlike the spot market, futures participants remained actively engaged during the rally to $111,000. This sustained speculative interest suggests that leverage-driven positioning was more influential in recent price dynamics. That said, this sustained futures market participation has been losing its aggressiveness since the first quarter of 2025 all-time high. Both the annualized funding rate and the 3-month futures rolling basis have shown a continuous downtrend, reflecting a declining appetite to take long positions, even as trading volume remains elevated. This points to a more cautious and less conviction-driven speculative environment. It may also indicate a larger volume of cash & carry arbitrage positions, and even heightened short-side interest.

In conclusion, Bitcoin remains range-bound between $100,000 and $110,000, with recent price action driven by macro headlines and sharp reversals. The CBD Heatmap shows strong support at $93,000 to $100,000, a key zone from the first quarter of 2025 top formation. However, signs of market fatigue are building. Profit realization is cooling, on-chain activity is declining, and spot volume failed to rise meaningfully during the recent all-time high push. While futures participation remains active, falling funding rates and futures rolling basis signal a cautious stance among speculators. As long as the price holds above key support, the bull trend remains intact. But without a revival in demand and conviction, the odds of a breakout to new highs appear limited in the near term.