The crypto liquidation after US-Iran conflict reached a staggering $1 billion, sending shockwaves through the digital asset markets. Following U.S. airstrikes on strategic Iranian targets, traders scrambled to reposition amid heightened geopolitical instability. The sudden military escalation spurred widespread panic selling, causing leveraged positions across major cryptocurrencies to get wiped out.
Geopolitical Tensions Trigger Chain Liquidations
Within hours of the U.S. strike, the crypto market saw a wave of forced liquidations, particularly in futures and margin trades. Bitcoin, Ethereum, and altcoins like Solana and XRP experienced swift downward price pressure, exacerbated by high leverage ratios.
According to data from Coinglass, over 200,000 traders were liquidated within a 24-hour span. Long positions were especially hit hard, as investors had been positioning for upward momentum prior to the geopolitical shock.
Market Sentiment Turns Bearish
The crypto liquidation after US-Iran conflict has severely impacted investor sentiment. The Crypto Fear & Greed Index dropped sharply into “Extreme Fear,” reflecting broader uncertainty in both crypto and traditional financial markets.
In addition to direct liquidation losses, market depth on major exchanges thinned, indicating that liquidity providers temporarily pulled back. This widened spreads and made trading more volatile, particularly for smaller cap tokens.
Bitcoin and Ethereum Lead the Decline
Bitcoin fell below key support at $61,000, triggering cascading liquidations. Ethereum similarly dipped under $3,300, as risk-averse investors exited their positions en masse. Analysts suggest that unless geopolitical tensions ease quickly, crypto may remain under pressure.
However, some traders are already looking for rebound opportunities, citing historical patterns of recovery following geopolitical shocks. Still, most analysts urge caution, warning that the macro outlook remains uncertain.
What’s Next for Crypto?
While the long-term fundamentals of crypto remain intact, short-term price action is likely to remain highly reactive to headlines from the Middle East. As the crypto liquidation after US-Iran conflict continues to play out, market participants are advised to reduce leverage, stay updated on geopolitical developments, and prioritize capital preservation.
