Bitcoin Falls Below $100,000 as Iran Threatens to Close Strait of Hormuz: Warning of Serious Macro Risks to Crypto Market
The digital asset market continued to witness a large-scale sell-off as the price of Bitcoin fell below the important psychological threshold of $100,000, hitting a low of $99,800. This event occurred right after the Iranian Parliament approved a proposal to close the Strait of Hormuz, a shipping route that accounts for up to 25% of the world's total oil exports. Geopolitical tensions in the Middle East are currently creating a wave of widespread instability, directly affecting both the energy and cryptocurrency markets.
Escalating tensions: US airstrikes, Iran responds with a strategic shutdown
Tensions between the US and Iran heated up again when the Pentagon confirmed that it had conducted airstrikes on several Iranian nuclear facilities yesterday. In response, the Iranian parliament quickly voted to close the Strait of Hormuz, the world's most important oil shipping chokepoint.
Although the final decision is still awaiting approval from the Supreme National Security Council (SNSC), the market immediately reacted strongly. Crude oil prices soared, the US dollar strengthened, while risky assets such as Bitcoin, Ethereum and XRP all plunged. Notably, Bitcoin fell below $100,000 for the first time in weeks, causing more than $950 million in position liquidations in just 24 hours.
A chain reaction across the entire cryptocurrency market
Not only Bitcoin, major altcoins are also under strong selling pressure:
Ethereum (ETH) is down 4%, currently trading below $2,200.
XRP falls below $2 for the first time since April.
The VIX volatility index surged, reflecting investor concerns about global financial market volatility.
In particular, liquidation activity was concentrated in highly leveraged long positions, leading to a domino effect on exchanges. With leverage still high across the market, the risk of further declines remains if there are no signs of geopolitical cooling.
Why is the Strait of Hormuz so important?
The Strait of Hormuz is a strategic gateway for oil exports from Gulf countries such as Saudi Arabia, the UAE, Kuwait, Iraq and Iran. More than 20 million barrels of oil per day, equivalent to about 25% of global production, are transported through this strait. Closing this strait would immediately push oil prices to high levels, causing inflationary pressure and creating a shock to the global economy.
Disruptions to the energy supply chain will increase fuel, transportation, and manufacturing costs, directly affecting consumption and economic growth. This also means that the US Federal Reserve (Fed) may have to delay its interest rate cut plan, or even return to tightening policy if inflation gets out of control.
Indirect impact: Cryptocurrencies under macro pressure
When inflation increases and interest rates are maintained at high levels, the opportunity cost of holding non-yielding assets like Bitcoin will increase. In the past, this has often been accompanied by capital flows out of the cryptocurrency market and into defensive assets such as treasury bonds, USD or gold.
In addition, the appreciation of the USD also puts additional pressure on cryptocurrencies. In the most recent trading session, the Dollar Index (DXY) bounced sharply, inversely correlated with Bitcoin, which could cause BTC price to continue to decline to the support level of $95,000.
Three Factors to Watch in the Coming Days
To gauge the next level of risk for the crypto market, investors should closely monitor three important indicators:
SNSC decision on the Strait of Hormuz: If Iran actually blocks this vital route, the global financial market will be severely affected.
Crude oil price developments: If oil prices surpass $100/barrel, inflationary pressures will become severe, triggering central bank tightening policies.
Fed statement: Any hint from the Fed Chairman regarding continued high interest rates will negatively affect Bitcoin and major coins.
Short-term outlook: Warning of extended downtrend
Experts say that, without unexpected positive geopolitical factors, the crypto market will continue to be under pressure in the short term. Maintaining Bitcoin above $95,000 will be an important psychological test. If this level is broken, the downtrend could extend to the $88,000–$92,000 region.
In short, Iran’s move to close the Strait of Hormuz has created a comprehensive macro shock that has had a strong impact on the crypto market. Investors need to be cautious, reassess their trading strategies, and manage their risks amid rising global uncertainty. Closely monitoring signals from Iran, OPEC, the Fed, and the oil market will play a key role during this sensitive period.