Ethereum Drops 10% to $2,450 Amid Middle East Tensions

Crypto prices experienced a significant decline due to escalating tensions in the Middle East. Ethereum's price dropped over 10% to $2,450 following Israeli airstrikes on Iran on June 13, 2025. This event sparked a broader market correction, leading to over $1.1 billion in liquidations within 24 hours. The downturn highlighted the crypto market's vulnerability to geopolitical tensions, with substantial financial shifts impacting major cryptocurrencies.

The immediate effect of the geopolitical conflict was evident in global markets, with significant volatilities in crypto valuations. Ethereum alone saw $291 million losses in perpetual futures, reflecting increased market skepticism and prompting risk-off behavior throughout crypto assets. This situation echoed past shocks, causing a drop in overall asset valuations.

Historically, crypto markets have declined during periods of macroeconomic unrest, similar to the recent tariff-induced drop. These instances underscore crypto's sensitivity to broader economic changes. Experts suggest potential continued pressure on crypto markets if geopolitical and economic hostilities persist. The correlation with broader market trends suggests possible volatility based on further global developments.

Bitcoin, which had been trading near its all-time high, saw a sharp drop to $101,095 on Friday, reflecting the market's sensitivity to geopolitical risks. The volatility in the crypto market mirrored the broader financial landscape, where safe-haven assets like gold saw a surge in demand. Gold prices rose to $3,450 per ounce, driven by concerns over inflation and interest rate policies. This contrast highlighted the differing roles of Bitcoin and gold in the investment landscape. While gold is traditionally seen as a safe haven, Bitcoin's performance was more aligned with risk assets like US equities.

Analysts noted that Bitcoin's correlation with risk assets made it more susceptible to market turbulence. If Bitcoin holds above the support levels of $95,000 to $100,000, it could retest its record high. However, the short-term outlook remained uncertain, with oil and gold predicted to continue moving in the opposite direction to equities and Bitcoin. The market's focus on short-term volatility and liquidity conditions further complicated Bitcoin's trajectory, as traders prioritized short-term market dynamics over long-term safe-haven attributes.

Despite the initial sell-off, Bitcoin managed to recover, bouncing back above $107,000. This rebound was attributed to a recovery in equity futures and a stabilization of market sentiment. The crypto market's resilience was further evidenced by a surge in inflows, with Bitcoin and Ethereum leading the charge despite inflation and war risks.

Looking ahead, the market's attention turned to the US Federal Reserve's policy meeting and rate decision. While futures markets predicted no change in rates, the outcome of the meeting could influence risk sentiment and potentially drive renewed momentum for Bitcoin. If investors seek alternative stores of value, Bitcoin could see a resurgence in the coming weeks.