Bitcoin Plunges 4% to $103,000 Amid Middle East Tensions

Bitcoin experienced a dramatic plunge to $103,000 on Friday, triggered by Israel’s airstrikes on Iranian nuclear and military targets. This escalation, marking the most significant military confrontation in the Middle East in years, sparked more than $1 billion in crypto liquidations, with over 246,000 traders wiped out in just hours. The fear wasn’t just about bombs and missiles. Analysts warned that if Iran retaliates by closing the Strait of Hormuz — a chokepoint for 20% of the world’s oil shipments — energy prices could skyrocket and risk assets like crypto would “fall off a cliff”.

The market’s reaction was swift and brutal: over $1.14 billion in positions were liquidated, with longs making up the vast majority of the losses. Binance alone saw a $201 million BTC-USDT position wiped out, underscoring the scale of the panic. Bitcoin, often touted as “digital gold,” failed to play its safe-haven role in the immediate aftermath, plunging from $107,000 to a low of $103,000 before rebounding slightly as Asian markets opened. Ethereum and Solana followed suit, each losing 6–7% in a single session.

Yet, beneath the panic, on-chain data reveals a powerful countermove: large Bitcoin holders, or “whales,” have quietly ramped up their accumulation, hinting that this crash may be setting the stage for a classic V-shaped recovery. According to CryptoQuant, newly created whale wallets — each holding over 1,000 BTC — have accumulated more than 600,000 BTC (roughly $63 billion) in the past three months, doubling their share of the circulating supply. These are not legacy holders, but fresh capital, likely from institutional investors positioning for a medium- to long-term rebound. In the hours after the crash, Glassnode tracked 17,000 BTC moving into accumulation addresses, echoing the whale behavior seen during the 2020 COVID crash and the 2022 Russia-Ukraine war.

Bitcoin’s reaction to war and crisis has always been volatile — but history suggests sharp drops are often followed by equally dramatic recoveries. During the 2020 COVID crash, BTC lost half its value in days, only to surge 583% over the next year. When Russia invaded Ukraine in 2022, Bitcoin initially dropped 20%, but rebounded 65% within two months. Even during the October 2024 Israel-Hamas flare-up, BTC fell 8.4% before rallying 22% in just 48 hours. This pattern — panic selling followed by whale accumulation and a strong rebound—has become a hallmark of Bitcoin’s behavior in times of crisis. Analysts now point to these precedents as reasons for optimism, even as geopolitical risks remain high.

Technically, Bitcoin’s fate in the coming days hinges on a handful of critical levels. The $100,000 mark is not just a psychological barrier, but also aligns with the 50-day exponential moving average and recent support from early May. Should BTC hold above this zone, analysts expect a retest of the $110,000–$112,000 range, which marked the all-time high just weeks ago. A daily close above $106,500 would confirm bullish momentum and a potential V-shaped recovery, while a break below $100,000 could open the door to deeper losses, with $92,000 as the next major support.

Despite the chaos, Bitcoin’s ability to rebound above $104,000 by the end of the day hints at underlying resilience. Traditional markets, by contrast, saw steeper losses, with investors piling into gold and safe-haven currencies. As the dust settles, the focus now shifts to Iran’s response and the potential for further escalation — or de-escalation — in the region. For now, the data shows that while retail sentiment remains shaky, the “smart money” is quietly positioning for a rebound. If history is any guide, those who buy into fear may once again be rewarded — so long as global tensions don’t spiral further out of control.