Bitcoin dropped below the $78,000 mark on Saturday morning, hitting a session low of $77,614 on Bitstamp, erasing all the gains the leading cryptocurrency had made since the start of May. The 24-hour decline of 3.2% reduced its market capitalization to $1.56 trillion, a drop of over $40 billion from the $1.6 trillion level recorded on Thursday.
Geopolitical Tensions Drive the Selloff
The selloff was triggered by heightened fears that the United States and Israel are preparing to resume bombing Iranian nuclear facilities. According to a New York Times report, any escalation in military action would likely involve a dual US strategy: intensified precision airstrikes targeting Iranian command-and-control infrastructure, alongside highly specialized ground operations to neutralize and seize enriched nuclear material stored deep in underground facilities in Isfahan.
Tehran immediately issued an ultimatum, vowing to “give a deserved response to any aggression.” Reflecting the urgency, the Israeli military has shifted to wartime footing, with local media reporting that the Israel Defense Forces are actively preparing for a prolonged multi-week campaign.
The news comes on the heels of a US-China summit that ended without a breakthrough on technology issues. Critics warn that renewed hostilities would result in heavy American casualties and a further spike in oil prices. By the close of trading on Friday, May 15, both Brent crude and West Texas Intermediate (WTI) had surged above $105 per barrel.
Crypto Market Meltdown
The selloff spread to altcoins, with HYPE becoming the only large-cap coin to suffer double-digit losses — down 10.5%. ZEC and LINK tumbled 6.4%, while XRP, which had rallied sharply after the CLARITY Act bill advanced on May 14, fell 4% to $1.41. Most altcoins recorded 24-hour losses exceeding 3%, dragging their combined market cap from just over $1.1 trillion to nearly $1.05 trillion at the time of writing.
Position liquidations wiped out nearly $700 million in leveraged positions within 24 hours, with long positions accounting for roughly 95% of the total, or $666 million.
Outlook
Bitcoin is currently consolidating near $78,000. Market sentiment remains fragile, and any fresh headlines on US-Iran military developments could trigger another wave of volatility. Investors should closely monitor geopolitical events and their potential spillover into commodity markets, as rising oil prices may feed into global inflation expectations.