The crypto market lost more than $170 billion in value over the past 24 hours, as a surge in oil prices and escalating tensions between the U.S. and Iran sent a shockwave through digital-asset markets. The sell-off triggered liquidations of over $1.5 billion in leveraged positions, the largest single-day wipeout in months.
What sparked the rout
The slide began after crude oil jumped more than 8% on reports of an Iranian naval interception in the Strait of Hormuz. The U.S. responded by deploying additional naval assets to the region, fueling fears of a broader conflict. Crypto traders, already nervous about macro headwinds, fled risk assets en masse.
Bitcoin dropped below $40,000 for the first time this quarter. Ether fell nearly 18% in a matter of hours. Altcoins suffered even steeper losses, with many tokens losing a third or more of their value.
The liquidation cascade
Data from major derivatives platforms showed successive waves of forced selling as long positions got margin-called. By late afternoon UTC, total liquidations crossed $1.5 billion. Most of the damage was concentrated on Binance and Bybit, where leveraged traders had piled into bullish bets over the previous two weeks.
It was, by dollar volume, the single biggest liquidation event since the collapse of FTX in late 2022. The speed of the unwind caught even seasoned traders off guard: some platforms briefly stopped processing withdrawal requests as network traffic surged.
What comes next
The immediate trigger — the Iran situation — has no clear off-ramp tonight. Oil prices remain elevated, and diplomatic channels are reportedly quiet. That leaves crypto markets exposed to further volatility.
For now, the focus is on whether the $170 billion drawdown marks a capitulation washout or the start of a deeper correction. Traders will be watching the Sunday open in Asian markets for a first read on sentiment.
