- Escalating Israel-Iran tensions and over $1.16 billion in crypto liquidations have triggered a sharp market sell-off, with Bitcoin dropping to $102K and Ethereum losing nearly 9%.
- Traders are bracing for more volatility ahead of the FOMC meeting, as rising demand for downside protection signals growing short-term bearish sentiment.
Escalating Israel-Iran tensions and over $1.16 billion in crypto liquidations have triggered a sharp market sell-off, with Bitcoin dropping to $102K and Ethereum losing nearly 9%.
Traders are bracing for more volatility ahead of the FOMC meeting, as rising demand for downside protection signals growing short-term bearish sentiment.
The crypto market faced a brutal sell-off this week as escalating tensions between Israel and Iran triggered panic across investors. A strike by Israel on Iran’s nuclear infrastructure on June 12 sent shockwaves through the market, leading to a staggering $1.16 billion in liquidations within 24 hours, according to CoinGlass.
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Bitcoin (BTC) took the biggest hit, plunging to $102K and losing 5% over the week. The sharp drop wiped out nearly $500 million, with leveraged longs suffering $421 million in losses. Ethereum (ETH) was also caught in the crossfire, shedding close to 9% and contributing $301 million to the liquidation total.
The turmoil didn’t stop with BTC and ETH. Solana (SOL) tumbled 8.4% to $144, while Sui (SUI) and Ethereum dropped nearly 8% each. Across the market, most major tokens bled red, with only Binance Coin (BNB), Ripple (XRP), and Hyperliquid (HYPE) showing smaller losses of 1-4%.
Adding to the uncertainty is the upcoming FOMC (Federal Open Market Committee) meeting, where traders are bracing for a possible shift in monetary policy. QCP Capital reported increased demand for puts over calls, indicating growing bearish sentiment and a strong push for downside protection.
“BTC risk reversals flipped sharply, with puts now holding a 5 vol premium over calls,” QCP stated, reflecting how traders are hedging against further declines.
Interestingly, DeFi tokens like Aave (AAVE), Maker (MKR), and Uniswap (UNI) emerged as bright spots, attracting buying interest amid the bloodbath. While the meme coin sector tanked, losing 5.7% weekly, DeFi posted a surprising 4.5% gain.
With $6B–$8B in leveraged shorts at risk of liquidation if BTC reclaims $111K–$112K, a potential rebound is still on the table. However, as geopolitical tensions simmer and the Fed looms, traders should buckle up for a volatile ride ahead.
The crypto market is on edge, and until clarity returns from both the Middle East and the Fed, caution remains the name of the game.