The cryptocurrency market has seen a sharp drop with Bitcoin (BTC) falling below $63,000, driven by the latest wave of US airstrikes on Iranian military targets. Geopolitical tensions that peaked last weekend have dampened investor risk appetite globally. The market failed to maintain the positive momentum of last week that had previously managed to hold the $64,000 level.
The official announcement from Tehran about the closure of the Strait of Hormuz until a date to be announced has further worsened the situation. The closure of the sea route that handles one-fifth of the world’s oil output immediately sent Brent crude oil prices soaring by 4%. Investors reacted in panic by moving capital out of risky assets such as crypto into absolute safe haven assets.
This Bitcoin price drop has triggered a massive wave of liquidity in the crypto derivatives market. Investors who were expecting the price to rise jumped by 169.83% in 24 hours, involving a loss of around $53.92 million. This liquidity put additional selling pressure, causing the global crypto market capitalization to shrink to $2.17 trillion.
Despite the price drop in the spot market, Bitcoin ETF instruments on Wall Street are still showing impressive resilience. Data shows that Bitcoin spot ETFs recorded net inflows of $90.44 million, with BlackRock’s IBIT fund dominating the market with an inflow of $86.83 million. This shows that long-term institutional investors are still taking the opportunity to accumulate assets at a discount.
From a technical perspective, Bitcoin is currently testing the critical support level of $62,000. Momentum indicators such as the RSI at 42 and the bearish MACD chart pattern indicate that selling pressure is still strong. If Bitcoin fails to defend the $62,000 level, analysts warn that the price risks falling to the next major support area at $61,000 to $60,000 in the near future.
