Bitcoin reversed its recent gains, sliding to approximately $69,000 after President Donald Trump issued a 48-hour ultimatum to Iran, demanding the country reopen the Strait of Hormuz or face military strikes on its power plants. The threat introduced a sharp wave of uncertainty into financial markets, with the crypto sector among the hardest hit. The move erased the gains accumulated during the previous week’s rally.
The prospect of attacks on civilian energy infrastructure rattled a market that had been heavily positioned toward further gains. Approximately $299 million in liquidations occurred within a 24-hour period as traders rushed to exit positions. Around 85 percent of those liquidations affected long positions, reflecting how broadly bullish sentiment had been before the announcement.
Major tokens fell alongside Bitcoin as the sell-off spread across the broader cryptocurrency market. The coordinated decline underscored how sensitive digital asset prices have become to geopolitical developments. Traders who had built up optimistic positions were caught off guard by the sudden escalation in tensions.
A Monday deadline now looms, by which point the ultimatum could result in the first direct strikes on power infrastructure connected to the ongoing conflict. That prospect is weighing heavily on market participants who had previously drawn comfort from a more accommodating posture by the Federal Reserve on interest rates. The central bank’s recent dovish signals had been a source of support for risk assets, but that tailwind has been overshadowed by the geopolitical threat.
The situation highlights the vulnerability of crypto markets to sudden shifts in global risk sentiment, particularly when threats involve critical infrastructure. Analysts note that the combination of a heavily long market and an unexpected geopolitical shock created conditions for an outsized liquidation event. Whether markets stabilize will likely depend on how events develop ahead of the Monday deadline.
Originally reported by CoinDesk.
