After jumping past $79,000 on Sunday evening, bitcoin entered the new business week on the wrong foot, slipping below $77,000 in an hour or so as geopolitical tensions returned to financial markets.
The decline came amid renewed fighting between the United States and Iran, following nearly a month of relative calm as the US reportedly focused only on increasing economic pressure. US Forces struck two Iranian launchers on the island of Larak on Sunday, while the latter retaliated with strikes against military targets stationed in Jordan.
US President Trump’s AI video of how Kharg Island, Iran’s key oil region, is being “blown to smithereens” didn’t help defuse the situation either.
Oil Up, Asian Markets Down
Brent crude reacted immediately with a near-3% surge to over $90 per barrel, reviving concerns about another energy-driven inflation shock. This is particularly worrisome following Fed Chair Kevin Warsh’s hawkish speech at Jackson Hole on Friday, as higher oil prices deteriorate the inflation picture.
In contrast to oil, Asian stock markets headed south after the attacks went public, with Japan’s Nikkei falling by roughly 2%. South Korea’s Kospi and Chinese equities also turned red, while US and European stock futures followed suit. The Japanese yen weakened beyond 160 against the greenback.
Bitcoin dipped below $77,000, losing over $2,000 of value. Additional pressure came from Wintermute, as on-chain data showed that the entity transferred 5,100 $BTC, worth almost $400 million, to Binance over the past two days, likely intending to sell.
Although this transfer doesn’t guarantee that Wintermute has sold, recall that similar actions taken by the market maker last week resulted in another leg down for $BTC and the alts.
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Ethereum’s situation was even worse, as it plunged from over $2,500 to under $2,400 in an hour. Lookonchain reported that a whale or an institution had deposited almost 41,000 $ETH (worth over $100 million) onto exchanges, a move typically made before selling.
Liquidations on the Rise
The sharp move south led to over $400 million in wrecked positions on a daily scale, with the lion’s share coming earlier this morning. Interestingly, $ETH longs are responsible for almost $100 million, while $BTC longs are just $62.60 million, according to CoinGlass.
The single-largest wrecked position also involved the leading altcoin, with a trader getting liquidated for $6.12 million on Aster. In total, more than 100,000 over-leveraged traders were wiped out in the past day.
