The cryptocurrency market faced a sharp downturn this weekend after the United States launched airstrikes on Iran’s nuclear facilities, triggering a wave of risk aversion across global financial markets. The sudden escalation in geopolitical tensions led to over $595 million in crypto long positions being liquidated, as traders scrambled to adjust to the new risk landscape .
What Happened?
On Saturday, the U.S., in coordination with Israel, targeted three of Iran’s main uranium enrichment sites—Fordow, Natanz, and Isfahan—in a move announced by former President Donald Trump . The strikes were intended to cripple Iran’s nuclear capabilities and were quickly followed by heightened rhetoric and promises of retaliation from Iran.
Market Impact
The immediate aftermath saw a dramatic sell-off in the crypto sector:
• Bitcoin (BTC) dropped below the $100,000 mark for the first time in over a month, falling as much as 4% in 24 hours and briefly touching $99,300 .
• Ethereum (ETH) experienced an even steeper decline, losing nearly 10% in the same period .
• The total crypto market capitalization fell by 1,65% to $3,15 trillion, with top altcoins like Solana (SOL), XRP, and Dogecoin (DOGE) also posting significant losses .
• Over 172.000 traders were liquidated, with Ether and Bitcoin traders suffering the largest losses—$282 million and $151 million, respectively .
Why Did This Happen?
The airstrikes injected a strong dose of uncertainty into global markets, prompting investors to move away from riskier assets like cryptocurrencies. This “risk-off” sentiment was compounded by concerns that the Middle Eastern crisis could drive up oil prices and inflation, potentially delaying any interest rate cuts by the U.S. Federal Reserve .
How Liquidations Work
Liquidations occur when traders using leverage are unable to meet margin requirements, forcing exchanges to close their positions. The $595 million in liquidations was largely concentrated on major exchanges like Bybit and Binance, which together accounted for two-thirds of the total .
What’s Next?
With the U.S. signaling the possibility of further military action, volatility in the crypto market is likely to persist. Traders and investors should remain vigilant, as geopolitical developments continue to shape market sentiment and price action.
