The US military airstrike triggers a massive collapse in the crypto world. Why did the Bitcoin 100,000 defense line collapse overnight?

Why is the 100,000 defense line as fragile as paper?

When six B-2 stealth bombers tore through the night sky over the Persian Gulf and Trump announced a "surgical strike" on Iran's nuclear facilities, global capital markets instantly fell into panic. Bitcoin, regarded as "digital gold," plummeted over 3% in just one hour, with a daily decline of 4.48%, the price breaking below $99,000, and the total losses across the network exceeding $1.015 billion, setting a record for the highest single-day liquidation in 2025. This geopolitical storm is pushing Bitcoin to a critical point of attribute revolution – is it truly digital gold, or a bloodthirsty risk monster?

This plunge is reminiscent of the market reaction at the outbreak of the Russia-Ukraine war in 2022—algorithm-driven trading in the crypto market always reacts to sudden geopolitical risks with "run first, ask questions later." Ironically, Bitcoin, which claims to be a "safe-haven asset," saw its correlation with the Nasdaq index soar to +0.61, becoming a "high beta tech stock," in stark contrast to its negative correlation with gold (-0.07). The market has finally acknowledged: Bitcoin is not gold, but an amplifier of risk assets.

The "Double Tail Strangulation" of War and Inflation: Bitcoin's Fatal Weakness

The market panic triggered by the US military's involvement is just the fuse; the real "thunder" is buried in a deeper economic logic:

1. The Lifeline of Oil is Under Threat

If the Strait of Hormuz is blocked by Iran, international oil prices may soar to $150 per barrel, and the pressure of rampant inflation will force the Federal Reserve to delay interest rate cuts, or even restart rate hikes.

2. Policy Expectation Reversal

The market originally bet on two interest rate cuts by the Federal Reserve in 2025, but inflation triggered by the war may render easing policies "stillborn," and the high interest rate environment continues to drain liquidity from the crypto market.

3. Trump's Tariff "Bomb"

If the U.S. policy of imposing tariffs on China expands, the turbulence in the global trading system will exacerbate the volatility of bitcoin, forming a "geopolitical + policy" double whammy.

As QCP Capital warns: the "twin tail risks" of war and inflation may continue to pressure Bitcoin in the second half of the year.

Long and Short Game: Retail Investors Cutting Losses vs Institutions Buying the Dip, Who is Leading the Market?

After Bitcoin fell below the key support level of $101,000, market divergence reached a boiling point:

• Retail Panic Selling

In the past 24 hours, 240,000 people have been liquidated, with long positions accounting for 89%. Margin traders have become "cannon fodder."

• Institutions quietly accumulating

The Grayscale Bitcoin Trust (GBTC) premium rate has rebounded from -20% to -15%, indicating that institutions are accumulating positions through compliant channels at lower prices.

• Technical Lifeline

$100,000 is both the trading zone since March 2025 and the support level of the lower Bollinger Band. If it fails to hold, it may drop to the annual low of $96,000.

The options market data reveals more about human nature in the game: the premium for 1-month call options has risen by 8%, with retail investors betting on a rebound; however, the 6-month implied volatility is negative, indicating that institutions are extremely cautious about long-term risks.

History Repeats? Bottom Fishing or Running for Your Life?

Looking back on the geopolitical conflicts in the past three years, Bitcoin price fluctuations have always followed the three-stage logic of "panic selling, liquidation and liquidation, and hedging and repatriation":

• During the 2023 Israel-Palestine conflict, Bitcoin briefly dipped to $27,000, but then rebounded due to safe-haven demand for funds in the Middle East.
• The 2024 Trump tariff policy triggers a plunge, but institutions are counter-cyclical buying at the support level of $95,000, pushing the price back to $100,000.

1. Short-term Defense

Keep a close eye on the support range of $96,000 to $100,000; if it breaks, initiate risk control.

2. Mid-term Layout

If it pulls back to $95,000 (the cost price for short-term holders), you can build your position in batches.

3. Macro Hedging

Pay attention to the US dollar index and Federal Reserve policies; a DXY drop below 90 could signal a bull market restart.

Ultimate Question: Has the "Digital Gold" Belief in Bitcoin Collapsed?

This plunge has torn away the last layer of Bitcoin's "fig leaf"—it has never truly become a safe-haven asset; instead, due to its high volatility, it has become a "barometer" of risk sentiment. But paradoxically:

• The Undercurrents of Middle Eastern Funds

Countries with capital controls such as Iran and Turkey may still transfer assets through Bitcoin, creating price support.

• Long-term narrative unchanged

The institutions' adoption of deepening, halving cycles, and fiat currency depreciation trends remains the underlying logic for Bitcoin to impact the $200,000 mark.

War will not kill Bitcoin, but it will accelerate market differentiation. The true winners are always those calm minds who "pick up chips in the midst of gunfire."

Do you think Bitcoin will drop below 90,000 or make a comeback? Can the Fed's interest rate cut expectations save the crypto market?