 ▲ Bitcoin (BTC) decline / ChatGPT-generated image |
Geopolitical risks originating in the Middle East are taking direct aim at the digital asset market, sending prices of major assets including Bitcoin (BTC) into an uncontrolled collapse.
According to cryptocurrency-focused outlet Coingape on February 6 (local time), news that the U.S. Department of State urged American citizens staying in Iran to leave immediately triggered a sharp sell-off, with Bitcoin plunging more than 11% to fall below the $65,000 level. The U.S. government warned that security threats are rapidly escalating, citing internet shutdowns and suspensions of flight operations within Iran. The emergency evacuation advisory came ahead of a planned high-level meeting between the United States and Iran in Oman, and markets are interpreting it as a severe risk signal that even factors in the possibility of an all-out war.
Geopolitical instability is colliding with a liquidity crunch in the digital asset market, setting off a destructive chain reaction. Over the past 24 hours, approximately $2.65 billion in forced liquidations occurred across global crypto markets, wiping out positions for more than 580,000 investors. In particular, as $2.2 billion worth of long positions were cleared almost instantly, Bitcoin slid intraday to as low as $64,792, marking its lowest level since October last year. Experts note that “with liquidity depleted, geopolitical shocks are triggering abnormal price swings of up to $10,000 in a single day.”
The situation in the altcoin market is even more dire. Ethereum (ETH) fell more than 9% in a single day to retreat to the $1,900 level, while Solana (SOL) plunged 12%, threatening the $80 range. XRP also tumbled over 15% to drop to around $1.15 before staging a modest rebound, highlighting a sharp deterioration in overall market resilience. The Fear and Greed Index, a gauge of investor sentiment, recorded 9 out of 100, entering a phase of extreme fear at its lowest level since the 2022 Luna collapse.
From a portfolio strategy perspective, experts are recommending a conservative approach that prioritizes capital preservation over profit maximization. This is because Bitcoin’s current price has fallen below the average acquisition cost of $76,052 held by major corporate holders such as Strategy, amplifying uncertainty on corporate balance sheets. With volatility surging to as high as 100% amid the imminent expiration of $2.6 billion worth of Bitcoin and Ethereum options, raising cash allocations to over 50% and remaining on the sidelines until clearer market direction emerges is seen as advantageous.
From a macroeconomic standpoint, a combination of tariff threats by U.S. President Trump, weak earnings in the technology sector, and mounting geopolitical risks is entrenching risk-off sentiment toward risky assets. Pessimists are warning that if Bitcoin fails to firmly reclaim the $65,000 support level, it could slide further toward the $42,000 range. Rather than being swayed by short-term technical rebounds, investors are urged to remain patient, focus on risk management, and maximize capital preservation until macroeconomic uncertainties are resolved.
Disclaimer: This article is for investment reference only, and no responsibility is assumed for any investment losses based on this information. The content should be interpreted solely for informational purposes.