Bitcoin sharply fell below $66,000 after a new escalation between the US and Iran. On Coinbase, the BTC price dropped to $65,385, marking the lowest point since the end of March.
The asset lost about 7% in a day, and on Tuesday the drop exceeded $4,500. This is the sharpest daily decline for the market since February 5. The military news coincided with an overloaded futures market and outflows from bitcoin ETFs, so the move quickly turned into a broad sell-off.
The Futures Market Could Not Withstand the Break
The main blow hit leveraged traders. According to CoinGlass, about 277,000 market participants had their positions forcibly closed in a day. The total volume of liquidations was about $1.83 billion.
Most of the closed trades were long positions. More than 90% of all liquidations were long positions, and the main losses were in bitcoin and Ethereum. This means the market was already too heavily tilted toward recovery.
When BTC broke down through important levels, exchanges began to automatically close positions. Such sales amplify the move by themselves. That is why the drop was not a smooth decline, but a rapid chain reaction.
Market Capitalization Fell by $150 Billion
In one day, the crypto market lost about $150 billion in capitalization. This is no longer a local reaction of a single asset, but a broad exit from risk.
Bitcoin was the first to break support, then the decline spread to the largest altcoins. In such situations, Ethereum and other liquid assets often fall after BTC, because traders reduce positions across the entire market, not just in one coin.
As a result, geopolitics became an external trigger, but not the only explanation. The market was already weakened by ETF outflows and a large volume of bullish bets. The new US and Iran strikes simply accelerated the risk reassessment.
The US Reports Intercepting Missiles and Strikes on Qeshm
US Central Command said American forces intercepted Iranian ballistic missiles and drones. CENTCOM also reported strikes on Qeshm Island, calling them a response to Iran’s attempted attacks in the region.
According to the US command, Iran launched missiles at neighboring countries, but they did not reach their targets. Two missiles were reportedly aimed at Kuwait, and three more at Bahrain.
For financial markets, such reports are dangerous not only in themselves. They increase uncertainty around the region, through which important trade and energy routes pass. In times of such uncertainty, investors usually reduce positions in volatile assets.
Talks Remain in Question
The escalation occurred amid attempts to extend the truce between the US and Iran. The parties are holding indirect talks on a further ceasefire and lifting the blockade of the Strait of Hormuz, but no agreement has been reached yet.
Donald Trump wrote on Truth Social that reports of a break in contacts between Washington and Tehran are untrue. According to him, talks are ongoing, including in the past few days.
At the same time, Iran’s Tasnim agency reported that Tehran may halt contacts with the US until Israel stops attacks on Lebanon. For the market, this looks like a set of conflicting signals. Some statements point to dialogue, others to the risk of talks breaking down.
Analysts See the Problem Inside the Market
The head of research at Bitrue Research Institute told Cointelegraph that the BTC drop cannot be attributed only to news about Iran. In his view, the decline is related to liquidations, large ETF outflows, and the break of technical levels.
This conclusion is important for assessing further movement. If the market were falling only due to military news, de-escalation could quickly bring buyers back. Now the situation is more complicated: futures need to stabilize, ETF outflows must stop, and BTC needs to hold the nearest levels at the same time.
Ajiima expects uneven consolidation. According to him, stronger support is in the $64,000–65,000 range. This area will now be tested to see if there is still sustainable demand in the market after the wave of liquidations.
ETFs Have Become a Separate Source of Weakness
Outflows from spot bitcoin ETFs have worsened the balance for buyers. After the launch of such funds, they became one of the main channels for institutional capital inflow into BTC.
When money leaves ETFs, it becomes harder for the market to hold important levels. This is especially noticeable when the price is already breaking support and the futures market starts closing long positions.
As a result, bitcoin faced several factors at once. Military news increased caution, ETFs showed declining demand, and futures added forced sales. This combination makes recovery less straightforward.
Buyers Are Looking at $64,000–65,000
After breaking $66,000, the nearest working area became the $64,000–65,000 range. If it holds, the market may move sideways and begin to recover after the sharp sell-off. Two conditions are needed for a more confident rebound.
- First — reduced tensions between the US and Iran.
- Second — a return of inflows to ETFs or at least a stop to outflows.
If BTC consolidates below $64,000, traders will start expecting a deeper correction. After $1.83 billion in liquidations, the market rarely returns to steady growth immediately. It usually takes time to remove excess leverage and regain liquidity.
What’s Next?
The coming days will show whether the drop below $66,000 was the final phase of futures market cleansing or the start of a deeper correction. The main level to watch is now around $64,000–65,000.
If US-Iran talks continue without new escalation and ETFs stop losing capital, bitcoin could quickly regain some losses. This scenario would look like a recovery after overheating.
If military risks persist and ETF outflows continue, the market will remain vulnerable. In this case, BTC will have to seek demand below the current range. Now bitcoin needs not loud statements, but confirmation of buying at key levels.
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