Bitcoin plummeted 3.3% to $103,556, marking its worst day since June, as Israeli airstrikes on Iranian nuclear facilities triggered over $1.16 billion in cryptocurrency liquidations, destroying long positions, and technical analysis indicates a potential further drop to $96,000.
Bitcoin experienced its worst single-day performance since June, plummeting 3.3% to $103,556, due to massive cryptocurrency liquidations triggered by Israeli airstrikes in Iran, resulting in over $1.16 billion in leveraged positions being wiped out within 24 hours.
The sell-off began in the early hours before the Israeli military launched Operation 'Rising Lion,' with Israeli Prime Minister Benjamin Netanyahu stating its target was the 'core' of Iran's nuclear program, including attacks on the Natanz enrichment facility and military infrastructure near Tehran and Tabriz.
This sudden geopolitical war has impacted global financial markets, with investors fleeing risk assets amid escalating tensions in the Middle East, causing Bitcoin to drop from a 24-hour high of $108,500.
Liquidation data reveals the severity of market panic, with long positions suffering the largest losses of $1.16 billion, while short positions only incurred losses of $113.97 million.
This chain reaction intensified throughout the day, with liquidation amounts reaching $20 million in the first hour, as algorithmic trading systems and leveraged positions were rapidly eliminated, causing liquidation amounts to surge to nearly $1 billion within 12 hours.
Geopolitical catalysts expose leverage in the cryptocurrency market.
The attack in Israel occurred around 3:30 AM local time in Tehran, exposing the dangerous over-leveraging of the cryptocurrency market, as the initial geopolitical war quickly morphed into a technical failure.
Netanyahu announced that the operation would 'last for several days until the threat is eliminated,' causing ongoing uncertainty that hindered any meaningful recovery attempts throughout the trading period.
However, if the war escalates, what we know as cryptocurrency has always acted as digital gold during periods of global uncertainty.
As algorithmic trading systems view cryptocurrencies as safe-haven assets, the speed and magnitude of the downturn further intensified, rapidly altering an already over-leveraged market sentiment.
Iran immediately retaliated by launching approximately 100 drones at Israel while declaring a state of emergency, further exacerbating market panic and maintaining selling pressure on all major cryptocurrencies.
For example, ETH fell from a weekly high of $2,700 to $2,500, a decline of more than 8%. Similarly, XRP dropped 6% in the past 24 hours, SOL fell 9%, and Dogecoin declined 9%.
This indicates that the sell-off is indiscriminate across the entire market and not just concentrated in Bitcoin.
Technical analysis indicates that Bitcoin may decline further.
Price trends across multiple time frames indicate that geopolitical developments have triggered technical failures for weeks, suggesting the market is susceptible to external catalysts.
The hourly chart shows that Bitcoin has decisively broken below the key support level of $106,500, with three different rejection points within the supply area between $109,500 and $110,500, indicating significant institutional selling pressure.
A bearish breakout would push Bitcoin below the psychological level of $105,000, with the next major demand area located near the integer target of $100,000.
This four-hour analysis also reveals a downward channel pattern that has existed since Bitcoin broke the $112,000 peak. The recent break below the channel's downward support line suggests an acceleration of the bearish trend.
The volume profile shows that as geopolitical news emerged, selling activity increased, with resistance around $112,000 seemingly posing significant resistance to any recovery attempts.
Technical structures suggest that any rebound may encounter new selling pressure, with a breakout target in the demand area of $100,000 to $102,000.
Most concerning is the collapse of the Ichimoku ascending wedge in the four-hour time frame, indicating that Bitcoin is trading below the cloud and suggesting a shift from bullish momentum to bearish momentum.
The ascending wedge indicates that despite rising prices, buying pressure is weakening, and a breakout from the wedge typically leads to a significant decline, with a measured moving target of around $96,000.
This technical target aligns with previous critical support levels, representing a decline of about 10% from current levels, which means if geopolitical tensions continue to escalate or other macro factors pressure risk assets, further downside could be faced.
