A promising crypto surge dramatically reversed course Friday. Bitcoin, seemingly unstoppable hours earlier above $106,000, crashed violently. This flagship cryptocurrency plunged below the crucial $100,000 support level. This unexpected volatility spike stunned traders globally. Ultimately, $450 million in leveraged positions got wiped out within hours.
Altcoins Suffer Steeper Declines
Major alternative cryptocurrencies fared even worse. Ethereum (ETH) plummeted a sharp 4.5% in just ninety minutes. Trading volume exploded to nearly 800,000 ETH during the drop. Solana (SOL), Dogecoin (DOGE), and Cardano (ADA) mirrored the steep descent. Each suffered significant 3% to 5% losses simultaneously. This broad sell-off signalled deep market anxiety.
Liquidations Effect
Furthermore, the violent price swing caught countless traders unprepared. Centralised exchanges saw massive forced position closures. CoinGlass data confirms liquidations hit $450 million across digital assets. Significantly, a staggering $387 million stemmed from long bets. These traders wrongly wagered prices would keep climbing. Their optimism proved extremely costly.
Market Stuck in Bull-Bear Stalemate
Bitcoin later clawed back some ground, hovering near $101,300. However, it remains trapped below its peak. James Toledano, Unity Wallet COO, described a market stalemate. “Bullish long-term outlook battles short-term risk-off sentiment,” he stated. Toledano noted persistent indecision grips investors. They debate if Bitcoin reclaims $110,000 or sinks toward $90,000 next. The escalating Middle East tensions offered a clear trigger. Iran-Israel conflict worries already spread through the markets. Therefore, the crash was due to events driven by geopolitical dynamics.
What is the Cause?
Trading in Asia later offered a fragile reprieve. Bitcoin stabilised above $100,500 as Monday dawned. Initial panic over U.S. strikes on Iran subsided somewhat. Altcoins like ETH, XRP, and SOL also pared losses. However, crude oil held gains near $76 per barrel. Fears persist that Iran might block the vital Strait of Hormuz. Market participants now adopt a cautious stance. Traders largely treat the U.S.-Iran clash as a flashpoint. They don’t yet see it causing a fundamental market breakdown. Consequently, the crypto sector holds its breath. Investors globally await Bitcoin’s next decisive move. Will bulls break the stalemate, or do bears gain control? Only time will tell.
Written By Fazal Ul Vahab C H
