- US-Iran tensions spark major crypto sell-off as Bitcoin and Ethereum drop sharply.
- Nearly $1 billion in leveraged crypto longs were liquidated as prices fell fast.
- ETF outflows and geopolitical risks add pressure with BTC now at the $70K level.
Bitcoin and the crypto market came under heavy pressure after fresh US military strikes inside Iran reignited fears of a wider Middle East conflict. The renewed tensions triggered a sharp wave of liquidations across crypto markets. Bitcoin fell to a six-week low, while concerns over rising ETF outflows and weakening market sentiment continued to grow.
Bitcoin dropped as much as 3.3% to $72,643, its lowest level since April 13. Ethereum also slid more than 4% to $1,965, marking its weakest level in nearly two months.
The latest sell-off followed new military developments around the Strait of Hormuz, one of the world’s most important oil shipping routes.
Trump Says US Will “Watch Over” Hormuz as Strikes Resume
President Donald Trump said no country would be allowed to control the Strait of Hormuz. It calls it “international waters” and promises the US would “watch over it.”
Hours later, US forces carried out strikes on Iranian military targets after Iranian drones were launched toward a commercial ship near the strait. A US official said Central Command shot down four one-way attack drones and also struck a drone-launching unit in Bandar Abbas.
The White House said the US intends to maintain the existing ceasefire. However, the latest attacks raised doubts about whether negotiations between Washington and Tehran are truly progressing.
Iranian state media had earlier claimed that a draft interim peace deal could allow shipping traffic through the Strait of Hormuz to normalize within a month. Meanwhile, the White House dismissed the report as “a complete fabrication.”
The renewed tensions quickly affected global markets. Oil prices rebounded after an earlier decline, Asian stocks weakened, and risk assets, including cryptocurrencies, moved sharply lower. Traders are now pricing in the possibility of supply disruptions and a broader geopolitical crisis.
Nearly $1 Billion in Crypto Liquidations
The market volatility triggered one of the largest liquidation events in recent weeks.
Crypto liquidations reached $930 million over the past 24 hours. Around 165,826 trader accounts were wiped out as leveraged long positions collapsed.
Data showed that 93% of liquidations were by long traders. Many had positioned for a market recovery after earlier ceasefire optimism.
Bitcoin accounted for roughly $366 million in liquidations, while Ethereum saw about $240 million wiped out. The largest single liquidation was a $15.34 million Bitcoin long position on Hyperliquid.
The strong imbalance toward long liquidations suggests traders had become overly optimistic that tensions between the US and Iran were easing. Instead, the new strikes quickly reversed market sentiment.
Bitcoin’s drop below $73,000 also increased concerns about another major sell-off. Traders are now closely watching the key $70,000 support level.
Bitcoin ETF Outflows Add More Pressure
Beyond geopolitical fears, Bitcoin is also facing growing pressure from outflows of US spot Bitcoin ETFs. Specifically, Bitcoin ETFs withdrew $733 million on May 27 and $1.07 billion over the past week. On a monthly scale, outflows have reached $2.07 billion.
Investors have also become more cautious as higher US Treasury yields and a stronger dollar tighten overall financial conditions.
The ETF outflows come at a sensitive time for Bitcoin. The asset had already struggled to regain momentum after failing to hold earlier highs.
Analysts say institutional demand remains critical for Bitcoin’s next major move. ETFs played a major role in the crypto rally earlier this year.
Strait of Hormuz Remains the Key Risk
Much of the market’s attention is now focused on the Strait of Hormuz. The narrow shipping route handles a large share of the world’s oil supply. Disruptions to traffic continue to trigger a surge in oil prices and heighten risk-off sentiment across global markets.
Iran and Oman are reportedly discussing a possible system to oversee shipping through the strait. Meanwhile, the US insists that vessels must continue to have free passage.
At the same time, talks between Washington and Tehran remain fragile. US Secretary of State Marco Rubio said there had been “some progress,” while Iranian officials stressed that no agreement exists until every issue is resolved.
Markets are now watching whether diplomacy resumes or whether another round of military escalation pushes Bitcoin closer to the psychologically important $70,000 level.
The recent sell-off also revived memories of the earlier $1.7 billion liquidation cascade this year. It highlighted how quickly leverage can build up and unwind during periods of geopolitical uncertainty.
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