Bitcoin briefly sinks below $99,000 as U.S. strikes on Iran trigger crypto market sell-off

Bitcoin fell to its lowest level since May over the weekend, as rising tensions in the Middle East and renewed inflation fears triggered a sharp selloff across digital assets.

Bitcoin dropped below the $99,000 mark on Sunday — its lowest level in more than a month — while ether plunged over 10% at one point, as the digital asset market became the first to price in rising geopolitical risk. Solana, XRP, and dogecoin also posted steep losses, dragging the entire crypto complex sharply lower.

By late Sunday, digital assets had started to recover. Bitcoin was trading just under $101,000, down just 1% over the past 24 hours, while ether has pared some losses, off 2.5% to around $2,200.

The sell-off appears to be a combination of geopolitical shock and macroeconomic concern.

Iran has reportedly threatened to block the Strait of Hormuz — a vital shipping lane that handles about 20% of global oil supply. JPMorgan warns that a full closure could drive oil prices as high as $130 per barrel.

One prominent macro research firm notes that such a spike could send U.S. inflation back toward 5% — a level not seen since March 2023, when the Fed was still actively raising rates.

That outlook has traders reassessing the path of interest rates — and rotating out of speculative assets like crypto.

While bitcoin is often pitched as an inflation hedge, it's currently behaving more like a high-beta tech stock. According to crypto data provider Kaiko, bitcoin's correlation with the tech-heavy Nasdaq has climbed sharply in recent weeks, after hitting a multi-month low earlier this year — a period that coincided with surging inflows into spot bitcoin ETFs.

Institutional positioning also appears to have shifted.

More than $1.04 billion flowed into spot bitcoin ETFs from Monday through Wednesday last week, according to data from CoinGlass. But those inflows collapsed heading into the weekend, with zero net movement Thursday and just $6.4 million on Friday — coinciding with President Donald Trump's early G7 departure and the announcement of a two-week review of U.S. options on Iran.

The technical breakdown added fuel to the selloff.

CoinGlass research shows bitcoin's drop below $99,000 triggered forced selling across offshore derivatives platforms like Binance and Bybit. At its peak on Sunday, more than $1 billion in crypto positions were liquidated during a 24-hour span — with over 95% coming from long bets, underscoring just how overexposed the market was heading into the weekend.