What should have been a quiet weekend turned into a nightmare for crypto holders. Within hours, roughly $253 million in leveraged positions were liquidated as panicking markets digested a world-dividing headline: Iran declared the Strait of Hormuz closed until stability is restored, while the United States insisted the passageway remains open to all vessels.
The two clashing claims circulated almost simultaneously, right after retaliatory US-Iran airstrikes reignited ahead of July 13, 2026, shattering a fragile ceasefire. Global markets immediately shifted into risk-off mode, with crypto being among the quickest to bear the brunt.
Bitcoin Wobbles, Altcoins Hit Harder
Bitcoin slipped from $64,300 at the weekly close to around $63,000, briefly touching a local low between $62,500 and $62,900. The drop was only around 1% - seemingly mild on the surface, but enough to trigger a domino effect across derivatives markets. Altcoins took a heavier hit: the Lighter (LIT) token plunged 8%, marking its first major pullback following a rally of over 200% across the past two months.
Turmoil in traditional markets was even more severe. South Korea’s Kospi index tumbled 9.2%, shares of SK Hynix - which recently IPO’d in the US last week - plunged 15%, while Japan’s Nikkei and China’s SSE index both dropped more than 2%. Nasdaq 100 and S&P 500 futures also pointed to a lower open. Oil prices served as a barometer of fear: Brent jumped over 4.5% at Monday’s open, while WTI surged nearly 12% from its July lows to around $75 per barrel - directly reflecting concerns over disruptions in one of the world’s most vital shipping corridors.
A Strange Signal Amid the Panic
What makes this selloff less straightforward than it appears: even as prices faced pressure, spot Bitcoin and Ether ETFs just broke an eight-week streak of outflows. This suggests institutional demand held steady despite retail panic. The US 2-year Treasury yield jumped above 2.35%, a 16-month high, adding further pressure on risk assets. Bitcoin’s daily RSI sits around 38 - weak, yet not presenting a clear reversal signal.
Some analysts, however, see a glimmer of hope. Ryker and Jelle argued that the recent 50-week and 100-week SMA death cross has historically marked the final phase of a bear market - a similar pattern emerged in September 2022, shortly before the bear market bottom at the time. Speculation has also circulated that a new bull market could begin around September 2026. Yet not everyone agrees: Snyder believes Bitcoin could still drop below $57,800, calling that scenario the healthiest outcome.
What Decides the Next Move
Traders’ eyes are now on two key US inflation prints: Tuesday’s CPI and Wednesday’s PPI, which will serve as catalysts for market direction ahead of the Fed’s policy meeting in late July. For now, crypto remains caught between two opposing forces - geopolitics that could deteriorate at any moment, and economic data that could either calm markets or exacerbate the turmoil. Asset holders who weathered this weekend know at least one thing for certain: volatility is far from over, and news from the Middle East remains the most unpredictable wild card.
Via CoinDesk.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
