A sudden escalation in Middle East tensions sent shockwaves through the crypto market early Thursday. Following Israeli airstrikes on Iranian military targets, digital assets faced a rapid sell-off. It took less than an hour for the crypto market to unravel, with about $335 million wiped out through forced liquidations as traders rushed to cut their losses.
Bitcoin plunged, falling from $67,500 to $63,990, a sharp 5.2% drop that caught many off guard. Ethereum followed suit, sinking 6.1% from $2,450 to $2,300. At the same time, trading desks lit up across major exchanges: Bitcoin’s 24-hour volume surged to $42 billion, and Ethereum’s hit $18 billion, highlighting how quickly the panic spread.
Long Traders Take the Biggest Losses
The bulk of losses came from bullish bets. Of the total wiped out, $220 million were long positions, with Bitcoin accounting for $150 million and Ethereum for $80 million. Many traders found themselves on the wrong side of the trade as the news hit.
The Crypto Fear & Greed Index plunged from 61 to 25 within hours, landing deep into the “Extreme Fear” zone. On-chain data showed more than 18,000 BTC flowing to exchanges in a 30-minute window, often a precursor to mass selling.
Broader Financial Markets Take a Hit
The fear wasn’t limited to crypto. Equity markets also turned red. S&P 500 futures fell 1.8%, Dow futures dropped 1.5%, and Nasdaq 100 futures dipped 2.1% as investors moved out of riskier assets.
Investor sentiment took a hard hit, with the Crypto Fear & Greed Index free-falling from 61 to just 25, well into the “Extreme Fear” category. Around the same time, on-chain trackers recorded over 18,000 BTC moving onto exchanges within a tight 30-minute stretch, a typical early sign of widespread selling pressure.
Bearish Indicators Raise Red Flags
Market signals pointed to more downside pressure. By 10:50 AM UTC, Bitcoin’s RSI on the hourly chart dropped to 22, while Ethereum’s fell to 24, both suggesting oversold conditions. Meanwhile, MACD indicators for both assets turned negative earlier in the day.
All eyes are now on Bitcoin’s $62,000 support level. If it breaks, analysts warn the price could slide toward $58,000, according to liquidity data from Binance. Ethereum also weakened compared to Bitcoin, as the ETH/BTC ratio slipped 1.2% to 0.036 BTC.
Traders Eye Next Moves Cautiously
Some market participants are watching for opportunities amid the drop, hoping prices rebound if tensions cool. But with volatility spiking, most are staying on the sidelines until clearer signals emerge.
Whether this marks a short-term panic or the start of a longer downturn isn’t yet clear. What’s certain is that crypto markets, still tied closely to global headlines, are as reactive and fragile as ever in the face of international conflict.
