The crypto market is experiencing a significant downturn today, June 13, with the total market capitalization plummeting by over 4% to $3.24 trillion. This sharp decline comes directly in response to escalating geopolitical tensions following Israelโs attack on Iran. ๐ฅ
Why is the Crypto Market Down Today? ๐ค
The primary catalyst for today's market slide is the military operation conducted by Israel inside Iranian airspace. This move has brought the conflict closer to an all-out war, causing ripples across global financial markets. Israeli Prime Minister Benjamin Netanyahu has stated that strikes will continue until the perceived threat is removed, fueling investor uncertainty. ๐
Investors are swiftly reducing their exposure to "risk-on" assets, including cryptocurrencies, and flocking to traditional safe havens. This shift has led to a sharp decline in crypto prices across the board.
Bitcoin (BTC) ๐ช dropped as much as 5.6% to $102,700 before a slight recovery above $104,000.
Ether (ETH) ๐ท fared even worse, dipping to $2,400, marking 9.4% losses in the last 24 hours.
XRP and Solana (SOL) also saw significant losses, down 5.8% and 9.6% respectively.
The impact isn't limited to crypto; US stock index futures have also dropped, while bond prices, gold ๐, and oil ๐ข๏ธ have moved higher. As capital markets commentator The Kobeissi Letter noted, "The market appears to be pricing in a new war."
Over $1.1 Billion in Crypto Liquidations ๐ธ
Adding fuel to the fire, the crypto market's sell-off has triggered a massive wave of liquidations in the futures market, totaling an staggering $1.15 billion in the last 24 hours. A significant portion of this, $1 billion, came from long liquidations โ the largest single-day liquidation since February 25. Short traders saw comparatively lower liquidations at $93 million.
Bitcoin and Ether led the losses with $448.1 million and $288.4 million in liquidations, respectively.
Solana, Dogecoin, and XRP also saw substantial liquidations.
This scale of liquidation intensifies price drops and creates a ripple effect of fear among market participants, leading to further selling pressure. ๐จ
A Technical Correction or Something More? ๐๐
Todayโs market decline follows a period of strong growth, with the combined market capitalization of all cryptocurrencies (TOTAL) surging by over 51% to $3.5 trillion between March and mid-May. The current pullback to $3.24 trillion has, interestingly, formed a "bull flag" pattern on the weekly time frame.
While the market briefly rose above the bull flag's upper trendline earlier this week before dropping back, this technical setup suggests that the underlying uptrend might still be intact. The Relative Strength Index (RSI) remains in the positive region at 57, indicating that market conditions could still favor upside movement.
However, a crucial level to watch is the lower boundary of the flag at $3.1 trillion. A weekly close below this point could trigger a further sell-off, potentially pushing the market towards the 50-day simple moving average (SMA) at $2.75 trillion, and even to the base of the flag at $2.31 trillion. ๐
Only time will tell if this is a temporary geopolitical tremor or a more significant shift in the crypto landscape. Stay tuned and stay safe out there! ๐ก๏ธ
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