Bitcoin suffered a sharp selloff on Saturday morning, tumbling to an intraday low of $77,614 on Bitstamp as fears escalated that the United States and Israel are preparing to renew airstrikes on Iranian nuclear facilities. The leading cryptocurrency has since recovered to trade near $78,000, but still marks a 3.2% decline over 24 hours—effectively wiping out all of its gains since the start of the month.
Geopolitical Shockwaves
The sudden drop was triggered by reports that Washington and Tel Aviv are hammering out a coordinated military strategy. According to a report from the New York Times, the plan could involve precision airstrikes targeting Iran's command and communications infrastructure, alongside specialized ground operations aimed at seizing enriched nuclear material stored deep underground in facilities near Isfahan. Tehran has responded with an ultimatum, vowing to give a 'deserved response to any aggression,' while the Israeli Defense Forces have shifted to wartime footing, preparing for a campaign expected to last several weeks.
Oil prices surged above $105 per barrel for both Brent and West Texas Intermediate (WTI) by the close of Friday, May 15, reflecting the market's pricing of heightened geopolitical risk. The spike in crude further dampened sentiment for risk assets, including cryptocurrencies.
Liquidation Cascade Hits $700 Million
The rapid decline triggered a wave of forced liquidations across the crypto derivatives market. Data from Coinglass shows that total liquidations surpassed $700 million in the past 24 hours, with long positions accounting for approximately 95% of the total—equivalent to $666 million. Leveraged bulls were caught off guard as the price broke through key support levels, exacerbating the downward move.
Altcoins suffered heavier losses than Bitcoin. HYPE was the worst-performing major token, plunging 10.5%, followed by ZEC and LINK, which fell 6.4% each. XRP, which had rallied sharply on May 14 after positive developments around the CLARITY Act, retreated 4% to $1.41. Most altcoins recorded losses exceeding 3%, dragging their combined market capitalization down from just over $1.1 trillion to nearly $1.05 trillion.
Outlook Remains Clouded
While Bitcoin has stabilized above the $77,600 level, the market remains on edge. Traders are closely monitoring the situation in the Middle East: any escalation in hostilities could spark another round of selling, while diplomatic progress might trigger a relief rally. The interplay between oil prices and broader risk appetite will also be pivotal in determining the short-term direction of the crypto market. Investors are advised to exercise caution and manage leverage carefully amid the heightened volatility.