Bitcoin suffered a sharp sell-off on Wednesday, sliding to its weakest level in more than two months as escalating tensions between the United States and Iran combined with heavy market liquidations to fuel a wave of investor anxiety across the cryptocurrency sector.
The world’s largest cryptocurrency dropped 7% during the day, breaking through a major support level and falling to $65,385 on Coinbase during early trading.
The decline marked Bitcoin’s lowest price since late March and extended a dramatic downturn that began earlier in the week.
Massive Sell-Off Follows Steep Tuesday Decline
The latest losses came after Bitcoin recorded its largest daily decline since early February, shedding more than $4,500 on Tuesday alone.
The sharp move lower triggered widespread liquidations throughout the crypto market, wiping out billions of dollars in leveraged positions.
Data from CoinGlass showed that approximately 277,000 traders were liquidated over the past 24 hours, with total losses reaching roughly $1.83 billion.
Long positions accounted for more than 90% of those liquidations, with Bitcoin and Ether traders bearing the brunt of the damage.
The broader digital asset market also suffered heavily, with around $150 billion erased from total cryptocurrency market capitalization during the sell-off.
Analysts Point to Multiple Factors Behind the Drop
While geopolitical developments have heightened market uncertainty, analysts suggest that the decline cannot be attributed solely to events in the Middle East.
Andri Fauzan Adziima, research lead at Bitrue Research Institute, said the downturn was driven primarily by a combination of leveraged liquidations, significant exchange-traded fund outflows, and the breakdown of key technical price levels.
According to Adziima, news surrounding Iran has intensified existing fears among investors rather than serving as the sole catalyst for the market collapse.
He noted that Bitcoin may continue experiencing volatile and uneven trading conditions in the near term, identifying the $64,000 to $65,000 range as a critical support zone.
A reduction in geopolitical tensions or an improvement in broader economic conditions could potentially trigger a strong rebound, he added.
Renewed Military Action Raises Investor Concerns
The market turbulence coincided with fresh military developments involving the United States and Iran.
On Tuesday, US Central Command announced that American forces had intercepted multiple Iranian ballistic missiles and drones.
The military also said it carried out what it described as self-defense strikes on Iran’s Qeshm Island after attempted attacks linked to Iran across the Middle East.
According to CENTCOM, several Iranian missiles launched toward neighboring countries failed to reach their intended targets.
The command reported that two missiles were fired toward Kuwait, while three others were launched toward Bahrain.
The developments heightened concerns among investors already monitoring the fragile security situation in the region.
Ceasefire Talks Show Little Progress
The latest confrontation occurred despite a ceasefire arrangement that has been in place between the United States and Iran for roughly two months.
Negotiations aimed at extending the ceasefire and addressing restrictions around the Strait of Hormuz have continued through indirect channels, but discussions have yet to produce a breakthrough agreement.
The lack of visible progress has added to uncertainty in global financial markets, with risk-sensitive assets such as cryptocurrencies reacting sharply to geopolitical headlines.
Trump Insists Communications Continue
Amid reports suggesting diplomatic contacts had stalled, President Donald Trump disputed claims that communications between Washington and Tehran had ceased.
Posting on Truth Social on Tuesday, Trump said reports that discussions had stopped were inaccurate, insisting that conversations between the two sides had continued uninterrupted in recent days.
His remarks followed a report from Iran’s Tasnim news agency, which stated that Tehran intended to suspend talks with the United States until Israeli military operations in Lebanon came to an end.
Crypto Market Faces Uncertain Near-Term Outlook
With geopolitical risks rising and traders still unwinding leveraged positions, cryptocurrency markets remain under pressure.
Investors are closely watching both diplomatic developments in the Middle East and technical price levels in Bitcoin for signs of whether the recent decline will deepen or stabilize in the days ahead.
