The symbolic threshold of $100,000 has just been broken. At the heart of this fall? The US attack on Iran, the threat of a closure of the Strait of Hormuz… and a series of liquidations on the crypto markets.
Increased tensions in the Middle East
Tensions rose another notch on the night of June 21-22. The United States launched a major military operation targeting several Iranian nuclear sites as part of Operation Midnight Hammer.
In response, the Iranian Parliament approved a bill authorizing the closure of the Strait of Hormuz, a strategic passageway through which nearly a quarter of the world’s oil transits.
The decision is not yet official and must still be approved by the Supreme National Security Council. The US administration has even asked China to intervene to calm the situation, in the hope of dissuading Iran from carrying out its threat. Beijing, which is heavily dependent on Iranian oil, remains silent for the time being.
Cascading liquidations
Since the announcement of the US strike, nearly $1 billion in positions have been liquidated, mostly long positions, on major exchanges such as Binance, Bybit, and OKX, according to Coinglass.
A classic phenomenon: the more the price falls, the more leveraged positions are forced to close… and the more this amplifies the fall.
Geopolitical uncertainty generally causes investors to flee risky assets. The fall in the price of bitcoin below $100,000 indicates that it is not yet considered a safe haven.
However, professional investors and investment funds are not active on weekends, nor are ETFs.
Here are some things to watch out for starting Monday:
- inflows and outflows on Bitcoin and Ethereum ETFs;
- how the price of gold (the ultimate safe haven) will evolve;
- the behavior of the stock markets when they reopen on Monday;
- the evolution of the price of a barrel of oil.
