The price of Bitcoin (BTC) decreased by 2.4% over 24 hours, reaching $104,966, due to geopolitical tensions, technical weakness, and liquidation of positions in the derivatives market.
Geopolitical risks: Escalating conflict between Israel and Iran, along with ongoing disputes regarding tariffs between the United States and China.
Technical weakness: The price broke the pivotal support level at $106,900 with negative technical indicators.
Liquidation of billions of dollars: Positions worth over a billion dollars were liquidated when the BTC price approached the $105,000 support.
Detailed analysis
1. Geopolitical factors
The escalation of the conflict between Israel and Iran on June 17 (news) drove investors towards safe assets, negatively impacting Bitcoin, which has traditionally been correlated with stock movements. Former President Trump's rejection of ceasefire terms with Iran and the G7 summit's early closure without resolving tariff policy disputes added further uncertainty to the markets (news source). These major economic factors have impacted cryptocurrencies in parallel with traditional markets, where Bitcoin showed a correlation of 0.89 with future stock indices S&P 500 during the decline.
2. Technical collapse
The price of Bitcoin failed to hold above the 10-day moving average at $107,048, triggering sell orders automatically. The MACD indicator showed a bearish crossover at -307, and the Relative Strength Index (RSI) dropped from 55 to 52, indicating weak selling momentum. The price is now testing a crucial support level at $104,842, which represents 61.8% of the correction according to Fibonacci analysis. A breach of this support could lead to a rapid decline towards $102,905 ([Technical Analysis](get-crypto-technical-analysis tool)).
3. Position liquidation
Long positions worth $1.01 billion were liquidated as Bitcoin approached the $105,000 level, according to community trading data. This caused additional selling pressure, as exchanges experienced an inflow of 32,000 Bitcoin during the decline ([News Source](search-crypto-news tool)). Negative funding rates (-0.0049%) indicate that traders are paying for short positions, which may pave the way for a compensatory rally if these positions are narrowed.
Summary
This decline represents an interaction between macroeconomic factors, technical weakness, and liquidation of leveraged positions. The support level at $104,842 should be monitored as a critical barrier. With the Federal Reserve meeting and ongoing tensions in the Middle East, is it possible that this correction extends to test the important psychological level at $100,000 before institutional buyers intervene?
