Starting on the evening of 22/6, Bitcoin (BTC) experienced a sharp drop, quickly losing the crucial psychological support level of $100,000. Early this morning (Hanoi time), the world's largest cryptocurrency fell below $98,300, its lowest point since early May.
By morning, BTC had recovered to around $100,000, but still remained 1% lower than the same time yesterday. Selling pressure remains high.
Coinglass, a derivatives market tracking platform, reported nearly 241,000 leveraged derivatives trades were liquidated in the past 24 hours. This equates to over $1.03 billion. Ether, Bitcoin, Solana, and XRP saw the most significant losses.
Liquidation occurs when an exchange closes a leveraged position due to the loss of some or all of the margin, if the investor doesn't have sufficient funds to cover the losses. Large liquidation events often signal local tops or bottoms in asset prices.
Approximately $921.4 million of the liquidations came from long positions, compared to only $108.75 million from short positions. This suggests that derivatives traders had largely anticipated a rise in cryptocurrency prices. However, the market reacted swiftly and negatively to the current geopolitical tensions.
According to CoinDesk, the cryptocurrency market's performance reflects Wall Street investors' risk aversion due to the increasing possibility of Iran blockading the Strait of Hormuz. Located between Oman and Iran, the Strait connects the Persian Gulf with the Gulf of Oman and the Arabian Sea, handling about 20% of the global crude oil supply.
Following large-scale US airstrikes on Iran last weekend, over 50 large oil tankers rushed to leave the Strait of Hormuz. JP Morgan describes this as their worst-case scenario in the Israel-Iran conflict. They predict oil prices could rise to $120-$130 per barrel, pushing US inflation to 5%, its highest since 3/2023. If this happens, the US Federal Reserve (Fed) will likely raise interest rates.
BTC's losses also weighed heavily on the broader cryptocurrency market, dragging down major altcoins like XRP, SOL, and ETH. XRP fell 6% to its lowest level since mid-April, while Ethereum slid to its early May levels, briefly dipping below $2,120.
Tieu Gu (according to CoinDesk, CNBC)
