Bitcoin Falls Below $77K as Oil Fuels Risk-Off Selling
Bitcoin fell below $77,000 and Ethereum dropped under $2,400 as renewed US-Iran fighting intensified risk-off selling across global markets. Fresh US strikes and Iranian retaliation raised concerns about disruption in the Strait of Hormuz, pushing Brent crude above $90 and later $94 a barrel. Higher oil prices increased inflation fears, while the US 10-year Treasury yield climbed to about 4.79%. Rising yields and energy costs could keep Federal Reserve policy restrictive, increasing the opportunity cost of holding Bitcoin and pressuring the Nasdaq and other growth assets.
Bitcoin briefly traded above $79,000 before losing more than $2,000 in about an hour and later recovering towards $78,000. Ethereum fell from above $2,500 to below $2,400 after a large holder deposited nearly 41,000 ETH, worth more than $100 million, on exchanges. On-chain data also showed Wintermute transferring about 5,100 BTC, valued at nearly $400 million, to Binance. The transactions may signal potential selling, but they do not confirm that the assets were liquidated.
Crypto liquidations accelerated during the decline. More than $400 million in positions were liquidated over 24 hours, including about $100 million in ETH longs and $62.6 million in BTC longs. Watcher.Guru separately estimated that roughly $100 million was liquidated within 60 minutes. More than 100,000 leveraged traders were affected, with the largest single liquidation worth $6.12 million on Aster.
The sell-off came despite strong institutional demand. US spot Bitcoin ETFs recorded about $217 million in inflows on Aug. 31, including approximately $205.9 million for BlackRock’s IBIT. The inflows followed a nine-session buying streak that brought roughly $3 billion into Bitcoin funds during August. Sustained ETF demand may support Bitcoin over the longer term, but near-term price action is likely to remain sensitive to oil prices, Treasury yields, Federal Reserve expectations, exchange inflows and further geopolitical escalation. Bitcoin remains vulnerable to volatility and has not consistently acted as a reliable geopolitical hedge.
Bearish
The immediate impact is bearish for Bitcoin and Ethereum. Renewed military escalation has triggered broad risk-off selling, while Brent crude above $90 and the US 10-year yield near 4.79% raise concerns about inflation and tighter Federal Reserve policy. Higher yields increase the opportunity cost of holding non-yielding cryptocurrencies and can reduce demand for high-beta assets such as Bitcoin and Ethereum.
Short-term trading conditions are particularly fragile. Large BTC and ETH exchange deposits may increase perceived supply, while more than $400 million in liquidations can force additional selling and amplify price swings. Leveraged traders may remain cautious, and a break below recent support levels could trigger further liquidations. Bitcoin’s recovery towards $78,000 shows that dip buyers remain active, but it does not yet confirm a trend reversal.
The medium- to long-term picture is more balanced because US spot Bitcoin ETFs recorded strong inflows, including a nine-session buying streak and roughly $3 billion of August inflows. This institutional demand could help absorb supply and support Bitcoin if geopolitical tensions ease and yields stabilise. However, ETF buying may not offset a sustained oil shock, rising real yields or further escalation. Similar historical risk-off episodes have generally produced sharp initial declines in crypto, followed by uneven recoveries. Overall, the event is bearish for near-term cryptocurrency prices, with longer-term support dependent on liquidity, Federal Reserve expectations and continued ETF demand.