Leading cryptocurrencies fell sharply on Wednesday as reports emerged of fresh U.S. military strikes in Iran, even as stock markets extended their record-breaking run.
Bitcoin (CRYPTO: BTC) dropped 2.03% to $74,176.96, coming close to sinking below the psychologically significant $74,000 level during the session.
Ethereum (CRYPTO: ETH) fell 2.65% to $2,017.29, with traders closely watching the key $2,000 support level as selling pressure mounted across the market.
XRP (CRYPTO: XRP) declined 2.03% to $1.30, while Dogecoin (CRYPTO: DOGE) slid 1.39% to $0.1000, with Solana (CRYPTO: SOL) also falling 1.83% to $82.27.
Cryptocurrency-related stocks were not spared, with Strategy Inc. (NASDAQ: MSTR) closing down 3.58% and Bitmine Immersion Technologies Inc. (NYSE: BMNR) falling 1.98%.
Over $450 million was liquidated from the cryptocurrency market in the past 24 hours, with $400 million in long positions erased, according to Coinglass data.
The global cryptocurrency market capitalization stood at $2.49 trillion, down 1.89% over the last 24 hours, as “Extreme Fear” sentiment prevailed according to the Crypto Fear and Greed Index.
The U.S. military carried out new overnight strikes in Iran, targeting a military site and downing Iranian drones that threatened the Strait of Hormuz, Reuters reported, citing a U.S. official.
The strikes came hours after President Donald Trump stated that the Strait of Hormuz will be “open to everybody” and “nobody’s going to control it.”
Blockchain analytics firm CryptoQuant highlighted a “structurally fragile setup” developing for Bitcoin, characterized by weak spot demand alongside bullish derivatives demand and rising Binance funding rates.
CryptoQuant warned that traders were positioning long through leverage, stating that “this often reflects late-stage speculative behavior: traders become optimistic after a recovery, long positioning increases, but actual capital participation fails to expand.”
Widely followed cryptocurrency analyst Ali Martinez noted that Ethereum’s Market Value to Realized Value ratio had dropped below the 0.8 band, a level currently sitting at $1,868 that has rarely been sustained for long historically.
Martinez argued that “this exact zone represents a high-probability macro accumulation window that builds the ultimate foundation for the next major bull market,” offering a more optimistic longer-term outlook despite near-term weakness.
While crypto fell, U.S. equities rallied, with the Dow Jones Industrial Average closing up 182.60 points, or 0.36%, at a record 50,644.28, while the S&P 500 edged 0.02% higher to 7,520.36 and the Nasdaq Composite added 0.07% to close at 26,674.73.
