Major digital assets recorded losses for a second day as geopolitical tensions heightened in the Middle East.
Bitcoin (BTC) has rebounded to $105,400 after falling as low as $102,900, while Ethereum (ETH) is down 6.3% to $2,550 over the past 24 hours. XRP declined nearly 4% to $2.15, and Solana (SOL) slid 6.4% to $147.
The total cryptocurrency market capitalization fell 5% in the past 24 hours to $3.4 trillion. Leveraged liquidations surged to $1.11 billion during the same period – the largest since February – according to CoinGlass. Bitcoin (BTC) accounted for about $438 million of that total, while Ethereum (ETH) recorded $304 million in liquidations.
U.S. spot BTC exchange-traded funds (ETFs) recorded $86 million in inflows on Thursday. Meanwhile, Spot ETH ETFs attracted around $112 million in inflows, according to SoSoValue data.
Israel Attacks Iran
Experts say today’s market losses are being driven by a combination of factors, but mainly escalating tensions in the Middle East and broader macroeconomic concerns.
Last night, Israel launched a major attack on Iran, striking and killing three top Iranian military leaders and nuclear scientists, major news outlets reported.
Tehran is reportedly planning to retaliate, while U.S. Secretary of State Marco Rubio emphasized on Thursday that the United States was not involved in Israel’s strikes, warning that “Iran should not target U.S. interests or personnel."
“The pullback we’re seeing is largely a reaction to escalating geopolitical tension, particularly the Israeli strikes on Iran,” Sid Powell, CoFounder and CEO at Maple Finance, told The Defiant. “That kind of external shock tends to send investors into risk-off mode, and crypto, especially leveraged positions, is often the first to get hit.”
Powell noted that more than $1 billion in liquidations within 24 hours highlights just how much leverage was still embedded in the system.
“A lot of this isn’t about the fundamentals of crypto but rather about broader market sentiment and positioning,” Powell said. “Despite the sell-off, we’re still seeing strong structural flows into the space, particularly through institutional products like ETFs. This looks more like a temporary shakeout than a change in trajectory.”
Corey Wilton, CEO of Mirai Labs, echoed Powell’s comments, stating that fears of a war in the Middle East are pushing oil and gold prices higher while sinking risk assets, such as crypto, lower.
“We’re seeing a classic flight to safety as investors pull back from more volatile markets,” Wilton said.
The geopolitical tensions come amid shifting macroeconomic outlooks, as despite recent softer-than-expected U.S. inflation data, the Federal Reserve is not expected to cut interest rates until its September meeting.
