Crypto Bulls Lose $310M as Bitcoin Falls to $61,481 on Middle East Escalation

Bitcoin’s July uptrend came to a sudden halt on Wednesday as escalating Middle East tensions caused the cryptocurrency to tumble 3.5%, falling from a daily peak of $64,100 to a low of $61,481. The drop erased nearly a week of gains that had pushed Bitcoin up almost 10% since the start of the month.

The sell-off was triggered by a combination of active military exchanges and the Trump administration’s decision to end sanctions waivers on Iranian crude oil. President Donald Trump’s comments that a memorandum of understanding between Washington and Tehran was ‘dead’ further soured investor sentiment.

The volatility wiped out $40 billion from Bitcoin’s market capitalization, reducing it from $1.28 trillion to $1.24 trillion. More than $62 million in long Bitcoin positions were liquidated, alongside total crypto liquidations exceeding $372 million. Long positions accounted for $310 million of the damage, with shorts totaling just $13 million.

Global equity markets were also impacted, with Asian indices like South Korea’s Kospi leading a regional retreat. U.S. benchmarks like the Nasdaq and S&P 500 managed to close mostly flat. The geopolitical tensions acted as a catalyst for energy markets, pushing Brent crude above $80 per barrel for the first time since June 19.

The end of sanctions waivers complicates Iran’s ability to generate oil revenue, raising the risk of retaliation through disruptions at key shipping chokepoints like the Strait of Hormuz. Higher crude oil prices could push the Federal Reserve to hike interest rates, which could dampen the bullish outlook for Bitcoin. However, if the Trump administration walks back its statements, oil prices could decline and Bitcoin could recover its previous levels.

Later in the day, Bitcoin rebounded above $64,000 after a brief flash crash to $62,800, with $108 million in short liquidations fueling the recovery.

Source: https://news.bitcoin.com/crypto-bulls-lose-310m-as-bitcoin-falls-to-61481-on-middle-east-escalation/