Crypto market drops as Iran-U.S. tensions rise and longs get liquidated

The crypto market fell about 2.5% to $2.45T as hopes for an end to the ongoing U.S.-Iran war faded. Bitcoin slipped to around $69.4k after bulls failed to hold the $70,000 level, while Ethereum fell about 4.4% to roughly $2.08k. Major altcoins also dropped, including SOL (-5.1%), XRP (-3.5%), and SHIB (-4.0%), alongside broad losses across risk assets. A key driver was derivatives liquidation. Over the past 24 hours, more than $193 million in long positions were liquidated across crypto futures and perps, according to CoinGlass. Bitcoin accounted for about $48.9M of the long liquidations, while Ethereum saw roughly $75.9M. Forced selling from liquidated longs can accelerate downside moves, creating a feedback loop for the crypto market. Macro and geopolitical pressure reinforced the selloff. The decline began after Iranian state media reported Iran rejected a U.S. proposal to end the conflict, hurting risk sentiment in Asia’s tech sector and even pulling down gold. Oil rebounded as the Strait of Hormuz reportedly remained closed, raising inflation concerns and weakening expectations for Fed rate cuts. CME Group FedWatch showed 93.8% odds that the Fed keeps rates at 3.5%–3.75%, while 6.5% priced a 25 bps hike. With liquidity expectations looking tighter under a more hawkish stance, the crypto market typically struggles—especially when leverage is elevated.