Bitcoin Plunges to $63K as US-Israel Strikes on Iran Trigger $515M in Crypto Liquidations

The cryptocurrency market experienced a violent downturn following reports of coordinated U.S. and Israeli military strikes on Iran, intensifying geopolitical tensions across the Middle East and sparking a widespread risk-off sentiment among investors.

Sharp Market Decline Erases Recent Gains

Within a single hour of the strike reports, the total cryptocurrency market capitalization plummeted 5.42%, erasing billions of dollars in value accumulated during recent bullish momentum. Bitcoin, the leading digital asset, suffered a nearly 6% decline, falling to approximately $63,410 from its recent high of $70,000 just two days prior.

The rapid selloff pushed market sentiment indicators back into the "extreme fear" zone, reflecting widespread investor anxiety about the developing international crisis and its potential impact on risk assets.

Geopolitical Tensions Escalate

Israeli Defense Minister Israel Katz publicly confirmed that his country launched what officials characterized as a "pre-emptive" missile attack against Iranian targets. Reports subsequently emerged indicating U.S. participation in the military operation.

In response, Iranian officials announced that Tehran is formulating a counterresponse to the strikes, with warnings that retaliatory measures could be substantial. The military action followed the breakdown of diplomatic negotiations between Washington and Tehran regarding Iran's nuclear program, which concluded without meaningful progress. Additional talks are scheduled for next week.

Massive Liquidation Wave Hits Derivatives Markets

The sudden price volatility triggered a cascade of forced liquidations across cryptocurrency derivatives platforms. According to data from CoinGlass, 152,275 traders saw their positions liquidated over a 24-hour period, resulting in total liquidations exceeding $515 million.

The single largest liquidation event occurred on the Aster exchange, involving a BTCUSDT position valued at $11.17 million. The liquidation surge amplified market volatility, creating additional downward pressure as leveraged long positions were automatically closed.

Bitcoin Tests Critical Support Levels

Market analysts are closely monitoring whether Bitcoin can maintain support above the psychologically significant $60,000 level. The benchmark cryptocurrency's inability to sustain its recent rally to $70,000 has raised concerns about the sustainability of the current market cycle amid heightened global uncertainty.

The geopolitical developments have introduced fresh volatility into markets already grappling with regulatory concerns and macroeconomic headwinds. Investors remain on alert for potential Iranian retaliation, which could further destabilize global risk assets.

Altcoins Experience Double-Digit Losses

The market downturn extended well beyond Bitcoin, with major altcoins experiencing severe declines. Ethereum, the second-largest cryptocurrency by market capitalization, dropped approximately 9%, falling below the $1,850 price level.

XRP declined 8%, trading near $1.29, while Solana, Dogecoin, Cardano, and Chainlink all recorded losses ranging between 8% and 12% within a matter of hours. The widespread nature of the selloff indicates that the geopolitical shock affected the entire digital asset ecosystem rather than specific segments.

Market Outlook Remains Uncertain

The cryptocurrency market now faces a critical juncture as traders assess whether the current geopolitical crisis will escalate further or move toward diplomatic resolution. The immediate future of digital asset prices may depend heavily on developments in the Middle East and whether Iran follows through on threatened retaliatory actions.

With global markets in a heightened state of tension, cryptocurrency investors are adopting a cautious stance, reducing leverage and reassessing risk exposure amid the uncertain geopolitical landscape.

Coinasity's Take

This selloff demonstrates that despite crypto's aspirations as a hedge against traditional finance, digital assets remain highly sensitive to global risk sentiment. The $515 million in liquidations reveals how overleveraged the market had become during the recent rally to $70,000. While the $60,000 support level for Bitcoin will be critical to watch, investors should recognize that geopolitical shocks can trigger violent moves regardless of technical levels. In an interconnected financial world, no asset class operates in isolation from major international crises.