Crypto Prices Are Dropping Fast — What’s Behind the Sell-Off?
Bitcoin and Crypto Prices Slide Amid Geopolitical Tensions and Fed Jitters
Bitcoin and the broader cryptocurrency market pulled back on Tuesday as rising geopolitical tensions and anticipation around the upcoming Federal Reserve interest rate decision weighed heavily on investor sentiment.
Bitcoin fell sharply from this week’s high of $108,915 to an intraday low of $105,500, while Ethereum (ETH) dropped more than 2.2%. The total crypto market capitalization dipped to $3.28 trillion.
According to data from Coinglass, crypto liquidations surged by 25% over the past 24 hours, totaling more than $359 million. Among the biggest losers were SPX6900, Immutable (IMX), Fartcoin, Pepe, and Worldcoin (WLD), all posting notable declines.
The sell-off mirrored losses in the broader financial markets, with the Dow Jones and Nasdaq 100 dropping by 165 and 100 points, respectively.
Middle East Crisis Stokes Market Anxiety
Investor anxiety deepened following fresh developments in the Middle East. Tensions escalated after Donald Trump publicly urged residents of Tehran to evacuate, hinting at the possibility of further strikes in the coming days. The situation worsened after two oil tankers collided and caught fire near the Strait of Hormuz — a key global energy transit route — pushing oil prices higher. Brent and West Texas Intermediate crude surged over 2.2% as fears of supply disruptions mounted.
These geopolitical developments marked a sharp reversal from Monday’s optimism, which had lifted crypto prices following reports that Iran was open to peace talks. That sentiment has since been replaced by concerns over a broader regional conflict and its potential economic fallout.
Why the Middle East Crisis Matters for Crypto
The escalating Middle East crisis is rattling risk assets like Bitcoin and altcoins, largely due to its implications for oil prices, inflation, and central bank policy.