The cryptocurrency market suffered a sharp drop on Monday with Bitcoin (BTC) plunging to a multi-week low of $76,650. The drastic fall erased more than $5,000 in BTC’s market value since it hit a high of $82,000 on Thursday night. It reflected investors’ concerns about a resurgence of geopolitical tensions.
The main cause of the market panic this time was driven by US President Donald Trump’s aggressive statement on the Truth Social platform warning that “time is running out” for Iran to accept Washington’s peace plan. The harsh statement came shortly after Trump held a surprise meeting with Benjamin Netanyahu on Sunday to discuss the latest military strategy.
The renewed war rhetoric has triggered a massive wave of panic selling in digital asset markets. Trading data showed that liquidations of futures contracts jumped to more than $660 million in 24 hours, with the bulk of that, $610 million, wiped out in less than two hours after Trump's tweet went viral.
The negative sentiment failed to be contained despite positive reports of a successful trade deal between the US and China following the Beijing summit. According to market data, China has agreed to buy 200 Boeing planes and $17 billion worth of American agricultural commodities annually over the next three years to reduce its trade deficit.
However, crypto investors opted to reduce exposure to risk-off assets due to the lack of concrete progress on the reopening of the Strait of Hormuz. Analysts warned that the digital asset market will face higher volatility throughout the week due to several macroeconomic factors that remain uncertain.
