Trump’s ultimatum regarding Iran sparks a $232 million liquidation wave; cryptocurrency market loses $45 billion in just half an hour
On Sunday, Bitcoin experienced a sharp decline of nearly $2,000 within 30 minutes after President Donald Trump issued a warning to target Iran’s power infrastructure unless Tehran reopened the Strait of Hormuz within 48 hours. This announcement sent ripples through global risk assets and initiated one of the most significant single-session liquidation events in crypto derivatives this year.
The leading cryptocurrency fell to $69,141, marking a decrease of 2.26% for the day. This sudden threat came as a stark contrast to Trump’s remarks just one day prior when he suggested he was contemplating “winding down” the conflict, leaving leveraged traders caught off guard.
Cryptocurrency Moves Parallel to Stock Market
The overall cryptocurrency market saw a decline of 1.95%, bringing its total market capitalization down to $2.38 trillion and demonstrating an almost perfect correlation with stock markets. The digital assets exhibited an 88% correlation with the S&P 500 and a remarkable 92% correlation with gold, indicating that cryptocurrencies are being traded more as macroeconomic risk instruments rather than independent stores of value.
Ethereum fell by 1.96% to reach $2,110; Solana decreased by 2.06%, settling at $88.25; while Dogecoin dropped by 2.92%, trading at $0.092. The CoinMarketCap Fear & Greed Index indicated fear among investors with a reading of just 28.
Leverage Amplified the Situation
The number of Bitcoin liquidations surged by an astonishing 86% over the course of one day, predominantly driven by long positions which constituted over 90% of all liquidations—a clear indication that traders had positioned themselves for continued recovery before this geopolitical shock occurred. The average Relative Strength Index (RSI) for cryptocurrencies dipped to around 40.1, nearing oversold conditions.
What Lies Ahead
Market analysts are closely monitoring the total market cap level at $2.34 trillion as immediate support—any breach below this could expose further declines towards the critical level at $2.29 trillion, corresponding with the recent swing high’s Fibonacci retracement at approximately 78%. Most experts agree that any potential recovery will heavily depend on diplomatic developments from Washington and Tehran over the next two days.