Crypto Markets Bleed: US-Iran Tensions Spark Liquidations

Bitcoin and altcoins drop as US-Iran tensions rise. Over $1 billion in liquidations recorded after US strikes near the Strait of Hormuz.

A wave of selling has swept across the digital asset market as investors react to growing fears that the fragile truce between Washington and Tehran could collapse. Tensions are escalating around the Strait of Hormuz, one of the world’s most critical energy corridors.

Bitcoin has declined by over 3.5% in the last 24 hours, trading at approximately $72,800 at the time of writing.

Ethereum lost nearly 5%, sliding below the psychological support level of $2,000.

The altcoin segment faced even heavier pressure. Solana, XRP, and Dogecoin recorded drops between 4% and 8%, while several higher-risk tokens saw double-digit losses.

The Crypto Fear and Greed Index plummeted to 31, signaling a sharp deterioration in market sentiment. The total cryptocurrency market capitalization has fallen to $2.45 trillion.

According to Coinglass data, nearly $1 billion in positions were liquidated over the last 24 hours. Long positions accounted for $870 million of these liquidations, while short positions made up the remaining $60 million.

Geopolitical Risk Hits Risk-On Assets

The market downturn followed confirmation from the U.S. Central Command (CENTCOM) regarding new strikes against Iranian military targets near Bandar Abbas.

Reuters reports that U.S. forces downed four Iranian drones near the Strait of Hormuz and subsequently attacked a ground control station that the U.S. claimed was preparing to launch another aircraft.

This represents the second U.S. strike on Iranian targets in just three days, significantly heightening concerns that the conflict could spiral out of control.

Markets reacted instantly, with investors moving to reduce exposure to riskier assets, including cryptocurrencies.

Altcoin Market Remains Most Vulnerable

Analysts note that during geopolitical shocks, investors typically liquidate positions in the more volatile segments of the crypto market first.

This trend is evident in current price movements, where altcoins are dropping much more sharply than Bitcoin. At the time of writing, Solana is trading around $80 after a nearly 7% weekly decline, XRP has lost over 6%, and Dogecoin remains among the weakest large-cap tokens with an 8% drop.

Market participants are closely monitoring the stability of the Strait of Hormuz. Any broader disruption to energy supplies could trigger a global risk-off cycle.

Despite short-term pressure, some analysts believe such geopolitical turmoil could eventually strengthen the case for Bitcoin as an alternative global asset outside the traditional financial system. For now, however, caution prevails as U.S.-Iran tensions remain high and the prospects for a lasting ceasefire appear increasingly uncertain.