Bitcoin Falls Below $73,000 Amid Middle East Conflict Escalation

An expert predicted further correction.

The price of the leading cryptocurrency fell to $72,804, marking its lowest level since mid-April. The market reacted to news of new U.S. strikes on Iranian military sites.

At the time of writing, the coin’s price had recovered to $73,013.

The second-largest cryptocurrency by market capitalization fell by 4.7% over the day and is trading at $1,984.

Over the past day, the total market capitalization of digital assets shrank by approximately $80 billion. The volume of forced liquidations reached $932.42 million.

The cryptocurrency sentiment index dropped to 22 points, entering the extreme fear zone.

Bitcoin at $70,000

Michael Kramer, founder of Mott Capital Management, warned of a possible decline in the leading cryptocurrency’s price to $70,000. He stated that the market would be pressured by a significant withdrawal of liquidity from the U.S. financial system. 

Between May 28 and June 4, the U.S. Treasury will conduct a series of debt settlements totaling approximately $150 billion. 

Kramer noted that Bitcoin often serves as a leading indicator of liquidity. When the department sells securities, funds move from the banking system to Treasury accounts at the Fed, reducing the amount of capital available for risky assets.

Impact of Macroeconomic Data

Nick Ruck, Director of Research at LVRG Research, commented to Cointelegraph that investors are pricing in geopolitical risks and potential disruptions in oil supplies. 

According to him, during periods of uncertainty, Bitcoin and Ethereum continue to behave as high-risk assets. Traders are currently concerned about the escalation of the conflict, which could impact inflation and Fed policy. The negative trend is exacerbated by declining liquidity and forced closure of margin positions. 

Amid the escalation of the Middle East conflict, energy prices have risen: WTI crude oil exceeded $92 per barrel, while Brent rose to $98. 

On May 25, the price of the leading cryptocurrency rose above $77,000 amid falling oil prices.