Key Takeaways
- Bitcoin fell below $78,000 as rumours of potential U.S. and Israeli military strikes against Iran intensified.
- The sudden crypto market crash wiped out $666 million in long positions.
- Investors look ahead as the Israel Defense Forces prepare assets for a conflict that could last for weeks.
Bitcoin Slips Below $78,000 as Geopolitical Tensions Rise
Bitcoin dipped below $78,000 Saturday morning amid fears that the U.S. and Israel are about to resume bombing Iranian facilities. Bitstamp data show that the top cryptocurrency dropped to a session low of $77,614 before recovering and consolidating around $78,000. The slide continues a downward trend that has seen the asset shed approximately $4,000 since tapping $82,000 on May 14.
The cryptocurrency’s plunge brought its 24-hour losses to 3.2 percent and effectively wiped out the gains bitcoin has made since the start of the month. It also dragged down its market capitalization to $1.56 trillion, a drop of more than $40 billion from the $1.6 trillion mark recorded Thursday.
According to a New York Times report, any escalation in hostilities would likely trigger a two-pronged U.S. military strategy: intensified, high-precision airstrikes targeting Iranian command-and-control infrastructure, alongside highly specialized ground operations designed to neutralize and retrieve enriched nuclear material secured deep within the subterranean facilities at Isfahan.
Tehran has immediately drawn a line in the sand, vowing “to deliver a well-deserved response to any aggression.” Mirroring this urgency, Israeli defense officials have shifted to a wartime footing, with domestic media outlets reporting that the Israel Defense Forces are actively preparing for a sustained, multi-week campaign.
While the odds of a return to combat operations have jumped now that the U.S. and China summit has concluded, critics warn that such an undertaking would entail huge American casualties and a further spike in oil prices. Already, both Brent crude and West Texas Intermediate (WTI) were above $105 per barrel by late Friday, May 15.
Meanwhile, the crypto market sell-off extended to altcoins, with HYPE being the only high-cap coin with double-digit losses, dropping 10.5 percent. ZEC and LINK plunged 6.4 percent while XRP, which surged following the advancement of the CLARITY Act bill on May 14, dropped 4 percent to $1.41. A majority of altcoins logged 24-hour losses exceeding 3 percent, which saw their aggregate market cap decline from just over $1.1 trillion to nearly $1.05 trillion at the time of writing.
The liquidation event wiped out nearly $700 million in leveraged positions within a 24-hour window, with long bets accounting for approximately 95 percent of the total, or $666 million.