Why did cryptocurrencies drop today? Israeli airstrikes on Iran caused Bitcoin, Ethereum, and Solana's prices to fall.
On Friday, June 13, due to escalating geopolitical tensions in the Middle East, investors felt uneasy, leading to a significant drop in the cryptocurrency market.
Following reports of Israel launching a large-scale military operation against Iran, digital assets plummeted significantly. The total market capitalization of cryptocurrencies dropped 7% in the past 24 hours, to $3.3 trillion.
As of the time of publication, Bitcoin and Ethereum trading prices have fallen about 5%, trading at $103,464. Ethereum is down 10% to $2,471, while Solana has dropped 11% to $141. XRP and BNB also experienced declines, down 6% and 4%, respectively.
Data from CoinGlass shows that cryptocurrency liquidations soared 125% in a single day, reaching $1.2 billion. Unsettled contracts in the cryptocurrency futures market fell 9.7% to $142 billion, with the relative strength index dropping to 28, indicating that the market has entered an oversold territory.
Despite facing sell-offs, the cryptocurrency fear and greed index compiled by software company Alternative remains in the 'greed' zone at 61 points, down 10 points from the previous day. The decline in market sentiment reflects investor uncertainty as traders assess the risk of larger-scale conflict breaking out.
Market turmoil stems from Israel's early morning attack on Iran. According to Reuters, the Israeli military struck multiple high-value targets, including the uranium enrichment facility at Natanz, a ballistic missile production base, and the headquarters of the Iranian Revolutionary Guard in Tehran. Iranian state media reported that General Hossein Salami was killed, along with civilian casualties including children.
Israeli Prime Minister Benjamin Netanyahu stated that this attack marks the beginning of 'Operation Rising Lion,' aimed at eliminating Iran's nuclear threat. Israel has declared a state of emergency, closed major airports, and strengthened air defense forces in response to potential retaliatory attacks.
Iran vowed to make a 'severe response.' U.S. Secretary of State Marco Rubio confirmed that the U.S. did not participate in the attack and emphasized that protecting U.S. forces in the region is the top priority.
In addition to cryptocurrencies, traditional financial markets are also taking a hit. U.S. stock index futures are down 1.5% across the board, and European stock markets opened with similar declines. Meanwhile, safe-haven assets have seen slight increases.
Gold prices rose 0.75% to $3,428 per ounce, while the yield on 10-year U.S. Treasury bonds fell to 4.32%. According to Market Watch, crude oil prices, often seen as a gauge of geopolitical risk, surged about 10% to $74 per barrel.
As tensions escalate and the likelihood of localized warfare increases, both the cryptocurrency market and global markets may continue to experience volatility. Risk appetite may further weaken, prompting capital to shift towards safer, more liquid assets until the situation stabilizes.
