Fear of US-Iran Clash! Crypto Market Evaporates $900 Million in One Day

▲ Iran, US, Bitcoin (BTC)/AI generated image ©

Bitcoin has finally fallen below the $73,000 mark, spreading fear across the entire cryptocurrency market. The simultaneous resurgence of US-Iran conflict and large-scale outflows from Bitcoin and Ethereum spot ETFs are threatening the $2.45 trillion market capitalization defense line.

According to investment media FXStreet on May 28 (local time), the total cryptocurrency market capitalization plummeted from $2.54 trillion to $2.45 trillion in a single day. The market decline was led by Bitcoin (BTC) falling below $73,000. The media analyzed that investors' risk aversion sentiment has strengthened due to the rapidly increasing risk of military conflict between the US and Iran.

The Iranian Revolutionary Guard Corps (IRGC) announced that it had launched an attack targeting a US airbase in retaliation for an attack near Bandar Abbas airport. The IRGC warned of “more decisive action” if further US attacks occur, claiming that the US should be held responsible. As geopolitical tensions escalated rapidly, international oil prices rose above $94 per barrel again, and West Texas Intermediate (WTI) traded around $90. Major Asian stock markets, including South Korea, Japan, and Taiwan, also fell by approximately 3%.

Massive long position liquidations occurred in the cryptocurrency market. The total liquidation volume in the past 24 hours exceeded $900 million, with approximately $873 million attributed to long position liquidations. The Fear & Greed Index also dropped to 31, further strengthening bearish market sentiment. The media diagnosed that Bitcoin's decline was a result of a combination of macroeconomic and geopolitical risks rather than a simple technical correction.

Institutional fund outflows also continued. According to CoinMarketCap data, Bitcoin spot ETFs saw an outflow of $737.7 million in one day, and Ethereum spot ETFs saw an outflow of $67.1 million. Both ETFs have recorded net outflows for 8 consecutive trading days. The media analyzed that institutional investors are rapidly reducing their exposure to volatile cryptocurrencies as the possibility of a US-Iran ceasefire becomes unclear.

The media assessed that the market has entered an extremely unstable phase. It is predicted that if geopolitical conflicts escalate further, additional selling pressure is likely to increase across all risk assets, including Bitcoin. Conversely, if Middle East tensions ease and ETF fund flows stabilize, the market could secure room for a short-term rebound, the analysis suggested.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*