The broader cryptocurrency market is down $2.45 trillion on Thursday, from $2.54 trillion the previous day, led by Bitcoin’s (BTC) decline below $73,000. The pullback aligns with over $800 million in outflows from Bitcoin and Ethereum (ETH) Exchange-Traded Funds (ETFs) on Thursday, as the market prices in the risk of a US-Iran war escalation.
Iran’s “decisive response” triggers crypto market sell-off
Iran’s Islamic Revolutionary Guard Corps (IRGC) targeted a US airbase, likely in Kuwait, in response to an attack near the Bandar Abbas airport. The IRGC further warned that “any further US attacks would trigger ‘a more decisive‘ response,” adding that “Washington bears responsibility for the consequences.”
Oil prices in the global market are back above $94, while West Texas Intermediate – the US Oil benchmark – trades near $90. The Asian markets, Taiwan, South Korea, and Japan, dropped roughly 3% on Thursday, pricing in further tensions in the Middle East. A similar sell-off wave triggered a steeper correction in Bitcoin.
Crypto market takes a nosedive as institutional backing wanes
Bitcoin’s slip below $73,000 on Thursday aligned with over $900 million in total liquidations over the last 24 hours, led by $873 in long liquidations. At the same time, the Crypto Fear and Greed Index has dropped to 31, reaffirming the tightening bearish grip on the market.
On the institutional side, investors are reducing their exposure to high-risk assets amid the US-Iran ceasefire in limbo. CoinMarketCap data show that Bitcoin and Ethereum ETFs recorded outflows of $737.70 million and $67.10 million on Wednesday, marking their eighth consecutive day of trimming.
In a nutshell, the growing tension between the US and Iran is weighing down on the fragile ceasefire and investors’ confidence in the volatile crypto market.
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