Over $1.79 billion wiped from cryptocurrency market as Bitcoin fell below $100,000 following US airstrikes in Iran.

The abrupt rise in tensions in the Middle East over the weekend prompted significant fluctuations in global markets, causing Bitcoin to fall beneath the $100,000 threshold for the first time since May.

This decline followed an unexpected U.S. airstrike on Iranian nuclear sites and a retaliatory decision by Tehran’s parliament to permit the closure of the Strait of Hormuz, a vital energy passage.

As per Coinglass data, over $1.79 billion in cryptocurrency positions were liquidated since Friday, with nearly 70% of those being long positions. Bitcoin alone dropped as much as 4.2% to reach $98,300 late Sunday before recovering approximately 3.1% in early trading in Asia.

Bitcoin price decline (Source: TradingView)

Ethereum experienced a 17% decline over the weekend but exhibited a similar rebound, increasing 6.75% after reaching weekend lows. The leading altcoin has decreased by 21% since its local peak of $2,877 earlier this month.

The broader market sell-off highlighted the vulnerability of risk assets to geopolitical disturbances, particularly with leverage levels in cryptocurrency markets remaining high. “The rapid liquidation of nearly a billion dollars indicates that many traders were positioned for relative stability, not a sudden escalation,” one derivatives trader informed CryptoSlate.

In traditional markets, crude oil prices surged due to concerns over potential disruptions to global energy supplies. Brent futures reached an intraday high of $81.40, a five-month high, before trimming gains to settle around $77.73, still up 0.93% for the day. WTI crude followed a similar pattern, peaking at $78.40 before retreating below $75. Analysts attributed the pullback to the ongoing flow of shipments through Hormuz.

“Current tensions could push Brent towards $100, with $120 becoming increasingly likely if Hormuz is indeed blocked,” Sugandha Sachdeva of SS WealthStreet stated to Reuters.

Gold, typically a safe haven during crises, unexpectedly fell 0.4% to $3,355/oz, while COMEX futures were down 0.5% at $3,370. Traders cited a stronger U.S. dollar, supported by safe-haven flows, as a significant factor for gold’s underperformance. “The rise in the USD held gold back despite the risks,” remarked Tim Waterer, chief market analyst at KCM Trade.

S&P 500 futures decreased 0.3% in premarket trading on Monday, recovering from larger overnight losses. The relatively subdued equity response suggests that investors still perceive the conflict as a regional issue rather than a wider geopolitical crisis. Yields on U.S. Treasuries remained largely unchanged, reinforcing that perspective.

Attention will be focused on the U.S. market opening later today to determine if oil and gold continue to decline alongside strength in equities and Bitcoin.

Oil disruption fears persist

The potential closure of the Strait of Hormuz by Iran remains a threat rather than a certainty. While the parliament has approved the action, shipping through the channel is anticipated to persist on Monday afternoon. Nevertheless, the Strait accounts for approximately 20% of the world’s oil shipments, and even a temporary disruption could have significant repercussions for energy markets and inflation expectations globally.

The White House has warned of further military action if Iran retaliates. Trump has called for negotiations while simultaneously inflaming tensions, asserting a need to “Make Iran Great Again.” The market will closely monitor any additional military or diplomatic developments this week. With Federal Reserve Chair Jerome Powell scheduled to speak twice this week, traders are also considering whether geopolitical uncertainty might affect the central bank’s interest rate trajectory.

Bitcoin’s swift selloff and partial recovery serve as a clear reminder of its changing role as a geopolitical indicator.

Bitcoin is currently responding less to macroeconomic data than to missile activity in the Middle East.

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