Bitcoin tumbled below $65,000 for the first time since March as military escalation near the Strait of Hormuz forced a violent deleveraging across crypto derivatives markets.
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Bitcoin drops to $64,500 as US-Iran strikes trigger $400M in liquidations
Bitcoin fell 9.8% to $64,500 on June 1 after US-Iran military strikes near the Strait of Hormuz triggered more than $400 million in forced liquidations across major exchanges. The drop erased all gains from earlier in the week, when the largest cryptocurrency had briefly touched $72,000 on hopes of a diplomatic breakthrough.
"What we saw was a classic risk-off unwind amplified by crowded long positioning," Rachael Lucas, crypto analyst at BTC Markets, said. "Bitcoin touched $72,000 midweek on hopes of a diplomatic breakthrough, then gave it all back as those hopes faded and oil supply concerns resurfaced."
The liquidation cascade swept across Binance and OKX within a four-hour window, with long positions accounting for more than 90% of the $400 million in total forced closures, according to Coinglass data. Bitcoin's open interest contracted sharply as leveraged traders were flushed out, while funding rates on perpetual swaps flipped negative — a signal that short positioning now dominates. US spot Bitcoin ETFs recorded an estimated $2.97 billion in net outflows, with BlackRock's iShares Bitcoin Trust posting one of its largest single-day withdrawal events since launch.
The selloff pushed Bitcoin below its 50-day moving average and through the $72,000 psychological level, shifting the technical structure from consolidation to distribution. Immediate support now sits at $60,000, a level analysts at BTSE and Bitrue have flagged as the next line of defense if geopolitical tensions escalate further. A de-escalation and a resulting drop in oil prices could trigger a rally back above $70,000, Andri Fauzan Adziima, research lead at Bitrue, said. Bitcoin remains roughly 47% below its all-time high of $126,080 set in October 2025.
$2.97 Billion in ETF Outflows Deepen the Selloff
The magnitude of institutional selling added a second layer of pressure beyond the derivatives unwind. BlackRock's IBIT, the largest spot Bitcoin ETF by assets, recorded one of its heaviest single-day outflow days since its 2024 launch, according to data from The Block. The outflows signal that even the most liquid ETF capital is not immune to geopolitical risk repricing, mirroring a pattern seen earlier in 2025 when conflict headlines triggered sharp BTC drawdowns regardless of underlying fundamentals.
What Comes Next
Three scenarios define the path forward. In a bull case, de-escalation within 48 to 72 hours triggers a relief rally, ETF inflows resume, and Bitcoin reclaims $73,000, opening a path toward $75,000. The base case sees consolidation between $60,000 and $66,000 as leveraged positions clear and sentiment stabilizes. In a bear case, further escalation pushes Bitcoin below $60,000, with $55,000 as the next technical target and sustained ETF outflows compounding the downside.
The Strait of Hormuz, a 21-mile-wide corridor through which roughly a fifth of global oil supply passes daily, remains the focal point. Iran's Islamic Revolutionary Guard Corps launched missile and drone attacks on June 1 targeting the Ali Al Salem airbase in Kuwait, retaliating for US strikes on Iranian air-defense radar installations between May 25 and May 28. Diplomatic talks to restore normal Hormuz transit, already fragile before the latest exchange, now face an uncertain path.
This article is for informational purposes only and does not constitute investment advice.
[1] Bitcoin Slumps to $71,500 as Geopolitical Tensions Trigger $400M+ in Liquidations[2] US strikes Iranian air defenses and drone site as Hormuz tensions rattle crypto markets[3] Bitcoin Drops to $65K as Geopolitical Tensions Weigh on Markets - CoinMarketCap[4] Bitcoin Price Crashes Below $73K as Pepeto Presale Pulls Capital Through the Selloff - StreetInsider
