22.06.2025 16:04

Bitcoin's recent price drop, a nearly 4% plunge in just 24 hours, saw the cryptocurrency briefly dip below $99,100, settling around $99,302. This dramatic correction reflects a confluence of factors, primarily stemming from heightened geopolitical instability and a market-wide risk-aversion trend. Liquidations in the crypto market exacerbated the decline, reaching a staggering $875 million.


The escalating conflict in the Middle East is the key driver of this downturn. Confirmed coordinated strikes on Iranian nuclear facilities by the US and Israel have sent shockwaves through global markets. Further adding to the uncertainty, the Iranian Parliament's approval of a bill to close the Strait of Hormuz – a critical oil transit point accounting for approximately 20% of global oil supplies – represents a serious threat to global energy security. Although requiring further approval, the Revolutionary Guards' readiness to act underscores the immediate risk. This geopolitical turmoil fueled a broad risk-off sentiment, impacting various asset classes.


While historical data from sources like CryptoQuant suggest Bitcoin sometimes acts as a safe haven following initial panic selling during geopolitical crises, the current response demonstrates a prevalent de-risking across the financial landscape. The Strait of Hormuz threat caused a 1% increase in oil prices, reviving inflation concerns. Moreover, Bitcoin's heightened correlation with the S&P 500, reaching 0.82 (significantly above its 30-day average of 0.65), highlights its sensitivity to broader macroeconomic trends.


The severity of Bitcoin's price drop is amplified by the significant unwinding of leveraged positions within the crypto derivatives market. Over $875 million in liquidations occurred in the last 24 hours alone, a substantial portion of which, approximately $233 million, directly impacted Bitcoin. These forced sell-offs contributed significantly to the rapid decline, underscoring the volatility inherent in leveraged trading.