Geopolitical Strife Disrupts Crypto Market

The Middle East’s escalating geopolitical unrest has triggered significant turmoil in the cryptocurrency landscape. Following U.S. military strikes on Iranian nuclear sites, declared “successful” by then-President Donald Trump, with indications of possible further actions, the market cap plummeted by 1.50% to $3.1 trillion. This geopolitical upheaval has resulted in liquidations worth $647.41 million over the past day, deeply impacting over 185,000 investors. The trading volume witnessed a 26.23% surge, reaching $136.38 billion as Bitcoin‘s value slumped to $98,000 and Ethereum decreased to $2,130. Furthermore, the Crypto Fear and Greed Index fell to 37, signifying severe market unease.

What Caused the Market Reversal?

A sudden shift in the market led to the liquidation of $657.99 million in long positions within 24 hours. Investors who presumed a price increase faced losses, with long positions amounting to $505.28 million being liquidated. The BTC/USDT trading pair on HTX exchange alone experienced a $35.45 million reduction.

How Did Exchanges React?

Bybit recorded the highest liquidation at $252.46 million, followed by Binance with $137.57 million, and Gate with $96.57 million. Exchanges such as Bitmex, Bitfinex, and CoinEx documented over 90% of liquidated positions as longs, highlighting the collapse of the expected upward trend since June 22.

The overall cryptocurrency market cap, after dropping to a nadir of $3.04 trillion, has marginally increased to $3.09 trillion. The breach of the lower Bollinger Band signals an oversold market, while the RSI at 38.41 suggests a potential short-term rebound.

Persistent pressure keeps the market below its 20-day moving average of $3.23 trillion. Bitcoin’s dominance has peaked at 64.9%, overshadowing altcoins, whereas Ethereum’s dominance has waned to 8.7%, revealing a decline in major Layer 1 protocols.

Despite the prevailing disruptions, certain altcoins like Story IP, Four, and Sonic have drawn speculative interest, achieving gains of 11.35%, 10.39%, and 7.68%, respectively, marking them as some of the leading performers of the day.

The situation underscores the sensitivity of cryptocurrency markets to geopolitical developments, with potential for ongoing volatility and investor caution in the near term. The shifts in altcoin performance also suggest selective interest amid broader uncertainties.