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The market’s leading crypto, Bitcoin (BTC), dipped below the $100,000 mark for the first time in over a month on Sunday, following US airstrikes on Iran as conflicts in the middle east continue to escalate.
This decline, which saw the Bitcoin price drop approximately 4% to around $99,300, coincided with a broader market sell-off, with Ethereum (ETH) experiencing an even sharper decline of nearly 10%. Overall, the total cryptocurrency market took a significant hit, falling about 7% in just 24 hours.
Geopolitical Unrest And Tariff Troubles
The timing of this downturn was particularly notable, occurring just hours after the US targeted three key nuclear sites in Iran. Tensions had escalated following a United Nations report that indicated Iran was not adhering to international prohibitions against developing a military nuclear program.
In response to these revelations, Israel conducted strikes against Iran, leading to further retaliation from the Islamic Republic. On Saturday, President Donald Trump declared on social media:
This is an HISTORIC MOMENT FOR THE UNITED STATES OF AMERICA, ISRAEL, AND THE WORLD. IRAN MUST NOW AGREE TO END THIS WAR. THANK YOU!
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This recent plummet below the psychologically significant $100,000 threshold follows a year of substantial gains for Bitcoin. After Trump took office in January, Bitcoin reached all-time highs above $100,000 in February, buoyed by executive orders aimed at supporting the cryptocurrency sector.
However, the cryptocurrency’s price soon mirrored the broader declines in financial markets, particularly after Trump announced severe tariffs in April, which saw Bitcoin fall to nearly $75,000, its lowest point in 2025.
Despite this volatility, Bitcoin had seen a resurgence, particularly in May when it reached new highs as Wall Street investors returned to the cryptocurrency through US exchange-traded funds (ETFs).
However, by late Sunday, there were signs of recovery, with Bitcoin trading approximately at $101,300, down only 1% over the previous day, while ETH managed to pare its losses to around $2,200.
Forced Liquidations Exacerbate Bitcoin Sell-Off
According to CNBC, Iran has also threatened to block the Strait of Hormuz, a crucial shipping route responsible for approximately 20% of the global oil supply, further adding to the broader financial uncertainty.
JPMorgan warned that such a blockade could drive oil prices up to $130 per barrel, which would have significant implications for US inflation, potentially pushing it back toward 5%—a level not seen since March 2023.
While Bitcoin has often been promoted as an inflation hedge, its recent behavior aligns more closely with that of high-beta tech stocks. Data from crypto provider Kaiko indicates that Bitcoin’s correlation with the tech-heavy Nasdaq has increased sharply in recent weeks, particularly following the surge in inflows into Bitcoin ETFs.
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Institutional investment patterns have also shifted. More than $1.04 billion flowed into spot Bitcoin ETFs from Monday to Wednesday last week, but this momentum dissipated as the weekend approached, with minimal net movement on Thursday and only $6.4 million on Friday.
The technical aspects of the market further exacerbated the sell-off. Research from CoinGlass revealed that Bitcoin’s drop below $99,000 triggered forced liquidations across offshore derivatives platforms, including Binance and Bybit.
During this period, over $1 billion in crypto positions were liquidated within 24 hours, with more than 95% of these coming from long positions, highlighting the market’s overexposure.
Featured image from DALL-E, chart from TradingView.com
