Middle East Risk Strikes! Cryptocurrency Market Shakes Again…$2.15 Trillion Support Line in Focus

Cryptocurrency Market 'Shaken' by Geopolitical Risks…Focus on Whether the $2.15 Trillion Support Line Holds

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

The cryptocurrency market showed weakness as geopolitical tensions originating from the Middle East escalated again. Analysis suggests that the decline was exacerbated by a surge in oil prices, risk aversion sentiment, and the liquidation of long positions in the derivatives market.

According to CoinMarketCap, a cryptocurrency market data aggregator, on July 7 (local time), the total cryptocurrency market capitalization fell by 1.27% over 24 hours, reaching $2.18 trillion. The outlet identified the geopolitical shock from the US withdrawal of waivers for Iranian oil exports as the primary cause of this decline. After tanker attacks in the Strait of Hormuz, the US rescinded its permission for Iranian oil exports, causing international oil prices to surge by approximately 3%, and investors began withdrawing funds from the risky cryptocurrency market. Over the past 24 hours, the correlation between the cryptocurrency market and gold prices was about 40%, indicating a strengthened preference for safe-haven assets.

In the derivatives market, leveraged liquidations further amplified the downturn. Bitcoin (BTC) long positions worth $54 million were liquidated in the past 24 hours, demonstrating that the bearish trend, initiated by macroeconomic shocks, was expanded through forced liquidations. Concurrently, the Fear & Greed Index recorded 28, remaining in the 'Fear' zone. The outlet analyzed that weak investor sentiment combined with high leverage led to a contraction in buying interest.

Technically, $2.15 trillion was presented as a key short-term support level. This range corresponds to the 50% Fibonacci retracement level, and if it holds, the market could attempt a rebound to $2.21 trillion, the outlet predicted. Conversely, if $2.15 trillion breaks, further declines could follow to the next support zone of $2.09 trillion.

The outlet assessed that this decline was more a result of external shocks from macroeconomic and geopolitical uncertainties than internal market issues in the cryptocurrency sector. It added that the future direction of the market is likely to be determined by whether the $2.15 trillion support line holds, US economic indicators, and changes in the geopolitical situation surrounding the US and Iran.

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