Cryptocurrency "Avalanche" Amid Geopolitical Conflict: Bitcoin Plummets, 200,000 Liquidated!

Recently, tensions and conflicts between the United States, Israel, and Iran have continued to escalate, creating waves in the cryptocurrency market like a boulder thrown into a calm lake and plunging the market back into a downturn.

As of press time, major cryptocurrencies in the market have suffered heavy losses. Bitcoin has dropped more than 3%, with its price falling to around $68,100; Ethereum has performed even worse, with a drop of more than 4%. According to CoinGlass data, in the past 24 hours, more than 200,000 people worldwide have experienced liquidations, with a total liquidation amount reaching $555 million, causing countless investors to lose everything.

Looking back since the attacks launched by the US and Israel on Iran at the end of February, bitcoin has acted like a rollercoaster. It once broke through the $75,000 threshold, giving investors some hope, but by March 23 it had retraced nearly 10%. In the context of geopolitical conflict, bitcoin has not become a favored safe-haven asset as some investors expected, but instead has plunged, an abnormal phenomenon that has attracted broad attention and deep reflection from the market.

Regarding this phenomenon, several experts have provided professional analyses. Li Ming, researcher at the Hong Kong Polytechnic University and executive president of the Hong Kong Web3.0 Standardization Association, pointed out that in emergency situations, some investors had no choice but to sell bitcoin for fiat to meet real-world needs, such as purchasing air tickets or daily necessities. At the same time, rising oil prices prompted some groups to sell assets in order to increase liquidity. Most critically, the high leverage in the derivatives market became the “fuse” for this flash crash—once there is selling, falling prices trigger massive leveraged positions to be liquidated, forming a “death spiral” and further increasing selling pressure.

Professor Zhao Binghao, head of the Financial Technology Rule of Law Research Institute at China University of Political Science and Law, commented: “These price movements are hard to explain as ‘safe-haven assets’ in the traditional sense and are more like typical ‘risk asset deleveraging’.” He further explained that the passive liquidation of high-leverage positions, liquidity stratification leading to stampedes, and capital withdrawing to cash or short-term debt all worked together to create the current situation in the crypto market. Wang Lixin, founder of Carbon Chain Value, was even more direct: “Its true nature as a high-beta global liquidity asset is now exposed.”

This flash crash in the cryptocurrency market serves as another warning to investors. Under a complex and volatile geopolitical landscape and in a highly leveraged market environment, the risks of cryptocurrency investment are greatly increased. Investors should act cautiously and avoid blindly chasing trends to prevent major losses.