Bitcoin faced renewed selling pressure on Monday after U.S. President Donald Trump issued a stark warning urging the evacuation of Tehran and called for an emergency meeting with his national security team, amplifying market anxiety over the escalating conflict between Israel and Iran 1 2 3. The cryptocurrency, which had recently staged a short-lived rally above $108,000, quickly reversed course, dropping over 2% and erasing recent gains as traders reacted to the latest geopolitical developments.
Geopolitical Risk Returns to Center Stage
The crypto market’s volatility was triggered by a series of high-profile events. President Trump, attending the G7 summit in Canada, abruptly left the meeting after warning on social media that “everyone should immediately evacuate Tehran”. This message, coupled with reports that Trump instructed the National Security Council to prepare for an emergency session in the White House Situation Room, fueled speculation about a potential U.S. response to the intensifying Israel-Iran conflict.
The warning came amid ongoing missile exchanges between Israel and Iran, with both sides reporting casualties and significant infrastructure damage 4 5. As the situation deteriorated, risk assets—including Bitcoin—moved sharply lower, reflecting a broader shift to risk-off sentiment across global markets.
Market Reaction: Liquidations and Volatility
Bitcoin’s price action was swift and dramatic. After briefly touching an intraday high near $108,780, the cryptocurrency tumbled to lows around $105,400, wiping out leveraged long positions and triggering a wave of liquidations. Open interest in Bitcoin futures dropped, and a notable spike in exchange inflows suggested that traders were moving coins to exchanges, possibly to sell amid the uncertainty.
Funding rates remained skewed toward long positions, raising the risk of further downside if negative headlines persist. Analysts noted that if macro fears do not subside, Bitcoin could retest the psychologically important $100,000 level in the near term.
Broader Implications for Crypto Investors
The latest episode underscores how sensitive digital assets remain to global macro and geopolitical shocks. While Bitcoin has often been touted as a hedge against traditional market turmoil, its recent price action suggests it is still closely tied to broader risk sentiment, especially during periods of acute uncertainty.
As the Israel-Iran conflict continues to evolve and with the U.S. administration signaling heightened alert, crypto investors are likely to remain cautious, awaiting further clarity before making directional bets.
