Iran launched a drone strike on Kuwait International Airport early Wednesday, damaging Terminal 1 and forcing a suspension of all air traffic. The attack, which Kuwait's Ministry of Defence called 'criminal Iranian aggression,' triggered a sharp sell-off across risk assets. Bitcoin dropped toward critical support, losing the $70,000 psychological floor and blowing past the Short-Term Holder Realized Price as over $700 million in leveraged long positions were forcibly closed in a 12-hour window. The total crypto market cap fell to $2.31 trillion.
Bitcoin plunges as geopolitical risk spikes
The sell-off accelerated after news of the strike broke. Bitcoin had already been under pressure amid stalled ceasefire talks between the US and Iran, but the physical attack on a major civilian hub pushed traders into full risk-off mode. The liquidation cascade hit exchanges hard — $700 million in longs evaporated, most of it concentrated on Binance, OKX, and Bybit. The drop below $70,000 is notable because that level had held as a psychological floor for weeks. Losing the Short-Term Holder Realized Price, a metric that tracks the average cost basis of recent buyers, suggests fresh selling pressure could extend losses if the geopolitical picture doesn't improve quickly.
Blockade and oil: The bigger picture
The Strait of Hormuz — through which 20-30% of the world's seaborne oil passes — has been under a US naval blockade since April 13, a move that has already disabled six commercial vessels and redirected 122 others. Wednesday's drone strike is the first direct attack on a major Gulf infrastructure target since the blockade began. The IRGC warned that 'disrupting the security of the Strait of Hormuz will carry a heavy price for the aggressive US military.' Oil prices surged on the escalation news, the US dollar strengthened, and Treasuries saw increased demand — classic signs of capital fleeing risk assets into havens.
Ceasefire in name only
Ceasefire negotiations between the US and Iran stalled over the weekend, with Iran accusing Washington of 'constantly changing its views.' Secretary of State Marco Rubio told Congress 'The war is over,' but ongoing US Central Command strikes — including a response strike on an Iranian military ground control station on Qeshm Island — suggest otherwise. Unconfirmed open-source images show severe damage and fires at Kuwait International Airport Terminal 1. There are also unverified reports that Iran launched a massive ballistic missile and drone attack targeting the US 5th Fleet headquarters in Bahrain, US bases in Kuwait, and an oil tanker near Dubai. Those reports could not be independently confirmed as of press time.
The immediate question for crypto traders is whether Bitcoin can reclaim $70,000 before the weekly close. With the Strait of Hormuz blockade still in place and diplomacy stalled, the risk of further escalation — and another wave of liquidations — remains high.
