Why Is Crypto Crashing Today? $11.5B Liquidated as Bitcoin Plunges Below $104K
2025-06-13 08:10:01Crypto Market Plunges Amid Geopolitical Turmoil: $11.5B Liquidated as Bitcoin Drops Below $104K
The cryptocurrency market faced a brutal sell-off on June 13, 2025, as escalating tensions in the Middle East triggered a wave of panic selling. Bitcoin (BTC) tumbled 3.2% to $104,400, while Ethereum (ETH) and Solana (SOL) plunged 9% and 10%, respectively. The sharp downturn wiped out $11.5 billion in leveraged positions, marking one of the largest liquidation events this year.
Israel-Iran Conflict Sparks Market Panic
The immediate catalyst for the crash was Israel’s airstrikes on Iranian military targets, raising fears of a broader regional conflict. Iran swiftly closed its airspace, while Israel declared a nationwide emergency, amplifying market uncertainty.
"The crypto market is hypersensitive to geopolitical shocks, especially in the Middle East," said Caroline Mauron, co-founder of Orbit Markets. "This sell-off reflects a classic flight to safety as traders unwind risky positions."
The liquidation carnage was overwhelmingly skewed toward long positions, with $10.7 billion in bullish bets erased compared to just $855 million in short positions. Bitcoin briefly dipped below $103,000 before finding tentative support, while altcoins suffered even steeper losses.
Macroeconomic Headwinds Compound Selling Pressure
Beyond geopolitics, analysts pointed to several fundamental factors weighing on crypto:
Fed Policy Uncertainty – The latest FOMC minutes revealed concerns about persistent inflation, dampening hopes for near-term rate cuts.
Profit-Taking by Long-Term Holders – Glassnode data shows Bitcoin’s recent rally to $111,800 prompted veteran investors to cash out, creating overhead resistance.
Regulatory Jitters – A leaked draft from financial regulators suggested potential staking restrictions, adding to market anxiety.
"Bitcoin’s correlation with traditional risk assets has increased amid macroeconomic uncertainty," noted Tony Sycamore, market analyst at IG. "Until the Fed provides clearer guidance, volatility will remain elevated."
Diverging Views on Bitcoin’s Trajectory
Despite the sell-off, some experts remain bullish. Han Xu, partner at HashKey Capital, argued that the impending end of quantitative tightening (QT) and expanding M2 money supply could reignite Bitcoin’s upward momentum.
"Once QT concludes—likely in late 2025—we expect real yields to drop significantly, historically benefiting both traditional and digital assets," Han told FXStreet. "Cryptos have a beta exceeding 8.5 against global liquidity shifts, meaning they react faster and more violently than stocks or commodities."
Han also highlighted Bitcoin’s growing institutional adoption, with corporate treasuries now holding $85.2 billion in BTC, led by MicroStrategy and its imitators. U.S. spot Bitcoin ETFs have amassed $45.3 billion in net inflows since launch, further cementing BTC’s "digital gold" narrative.
Altcoins Hit Harder, Meme Coins Collapse
While Bitcoin showed relative resilience, altcoins faced deeper losses. Ethereum struggled to hold $2,600, reflecting weakening momentum. Meme coins like Dogecoin (DOGE) and Pepe (PEPE) plummeted over 15%, exacerbating the downturn.
"ETH’s underperformance suggests traders are rotating into BTC as a safer haven during turbulence," said a Bitfinex analyst. "The lack of strong catalysts for Ethereum’s ecosystem is also weighing on sentiment."
What’s Next for Crypto Markets?
Traders are closely watching:
Middle East Developments – Further escalation could push Bitcoin toward $100,000 support.
U.S. Jobs Data – A weak report might revive Fed rate-cut bets, boosting crypto.
Institutional Flows – ETF inflows could stabilize prices if macro conditions improve.
"History shows crypto markets recover quickly from geopolitical shocks," said Hunter Horsley, CEO of Bitwise. "If Bitcoin reclaims $110,000, we could see a swift rebound."
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Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.
Sources:
FXStreet: "Crypto Markets Tumble Amid Middle East Tensions, Wiping $11.5 Billion in Liquidation"
Coinpedia: "Why Is the Crypto Market Going Down Today?"
Crypto Times: "Crypto Market Crash: 5 Reasons Why BTC, ETH, XRP, Altcoins Price Fell Today"
TradingView: "Here’s What Happened in Crypto Today"
CoinTelegraph: "Bitcoin Trader Peter Brandt Speculation BTC Crash, Analysts Disagree"