Under the shadow of war, has the cryptocurrency market once again become a frightened bird?

Author: 1912212.eth, Foresight News

On June 13, Bitcoin dropped from $108,000 to $102,664, marking a rare seven consecutive declines on the four-hour chart. Ethereum fell from around $2,800 to $2,455, experiencing an unusual nine consecutive declines on the four-hour chart. Many altcoins suffered significant losses due to the market's influence.

In terms of open interest data, according to Coinglass, $1.12 billion was liquidated across the network in 24 hours, with $1.04 billion in long positions liquidated. The largest single liquidation occurred on Binance's BTCUSDT, valued at $201 million.

On June 12, glassnode monitoring data showed that Ethereum's open interest had just reached a historical high, surpassing $20 billion. Although the ETH price slightly retraced from the $2,800 level, the market leverage continued to accumulate as traders increased leverage using stablecoins.

Additionally, after the publicly traded company SharpLink Gaming, known for its "ETH Microstrategy," filed documents with the SEC regarding "PIPE investors selling their shares," its stock price plummeted about 70% in after-hours trading, causing a significant negative impact on ETH as well.

The company submitted an S-3ASR registration statement, allowing the resale of up to 58,699,760 shares related to its private equity investment (PIPE) financing from over 100 shareholders. The market initially interpreted this statement as indicating that PIPE investors had sold their holdings. However, the company's board chairman, Joseph Lubin, stated on the X platform that the market "misread" the S-3 document, which was merely a pre-registration of shares for potential resale. This is a standard procedure following PIPE transactions in traditional finance and does not represent actual sales.

The significant increase in futures open interest indicates that the main driving force behind this round of price increases is not spot buyers but leveraged futures traders. In contrast to Bitcoin, which is still dominated by spot demand, Ethereum's trend has shown divergence. Recently, there has been a surge in bullish options buying, coupled with gamma hedging effects, putting ETH at a clear risk of a gap down. The market has become increasingly fragile and sensitive to changes in momentum.

As the market anticipated Ethereum to lead a strong rebound for altcoins, it turned downward again. What exactly happened?

Military Conflict Erupts Between Israel and Iran

In the early hours of the 13th, Israeli Defense Minister Katz stated that Israel had launched airstrikes against Iran. Katz mentioned that after a preemptive strike against Iran, Israel is expected to soon face missile and drone attacks. According to Xinhua News Agency, Israeli Prime Minister Netanyahu stated on the 13th that the Israeli military's strikes against Iran would "last for several days."

Currently, a state of emergency has been declared across Israel. CNN cited Israeli sources reporting that Israel is preparing for significant retaliation from Iran, which is expected to be larger in scale than previous Iranian attacks on Israel. Sources indicated that Israel intends to continue attacking Iran until it believes the nuclear threat from Iran has been eliminated, although there are some doubts within Israeli security agencies about whether this goal can truly be achieved through unilateral Israeli action. Israel's main targets include three areas: Iran's nuclear facilities, military assets, and key figures in the Iranian military.

Iran's state television recently reported unverified claims that General Salami, commander of Iran's paramilitary Revolutionary Guard, may have been killed in the Israeli attack. The television station added that another senior guard officer and two nuclear scientists may also have died. The report did not provide further details.

Internationally, Brent crude and WTI crude oil futures both rose over 8%. Nasdaq futures briefly expanded their decline to 2%, S&P 500 futures fell 1.8%, and Dow futures dropped 1.6%. Spot gold briefly rose above $3,420 per ounce, gaining nearly 1% during the day.

Federal Reserve Delays Rate Cuts

Since the Federal Reserve cut rates in December 2024, it has yet to show any signs of easing its stance on rate cuts.

U.S. President Trump has also expressed his frustration. Recently, he has frequently stated on social media his desire for the Federal Reserve to lower interest rates, saying, "We have a lot of short-term debt, and I prefer long-term low-interest debt. If we lower rates by 1%, it means paying 1% less."

"I suggest the Federal Reserve cut rates by 200 basis points."

Powell has not backed down on this issue. The market expects Powell to be dismissed, but Trump has simultaneously stated that "he will not fire Federal Reserve Chairman Powell; he just needs to lower rates, and our inflation data looks good."

Hedge fund giant Paul Tudor Jones stated that President Trump will choose a "very dovish" Federal Reserve chairman.

Recently, after the release of CPI data and the U.S. May core PPI, traders expect the Federal Reserve to cut rates twice this year, starting in September.

In the current environment of tightening market liquidity, even minor fluctuations can easily trigger significant market declines.

Frequent Black Swan Events

The international market has been quite unstable recently. On June 12, an Air India Boeing 787 passenger plane crashed while en route to the UK, marking the first accident involving this model. Multiple media outlets reported that the death toll exceeded 240, and Boeing's stock price fell over 6% in response to the news.

Previously, after a heated argument between Tesla founder Musk and President Trump, the situation recently concluded with Musk admitting fault. According to Reuters, President Trump praised Tesla during an event at the White House regarding California's electric vehicle regulations, stating, "I like Tesla… I discussed electric vehicles with Musk," and added, "Musk really likes me."

Riots in Los Angeles are ongoing, with curfews imposed in some areas. The Global Times reported that at least 378 people have been arrested in Los Angeles since last Saturday. The mayor of Los Angeles announced on the evening of the 10th that a curfew would be implemented from 8 PM on that day until 6 AM on the 11th in certain areas of downtown, with the duration of the curfew to be determined after assessment. The ongoing back-and-forth between President Trump and California Governor Newsom continues. Protests against the enforcement actions targeting illegal immigrants are spreading from Los Angeles to other parts of the U.S.

Market Outlook

HashKey Capital investment manager Rui tweeted, "The liquidity of altcoins has hit rock bottom. Aside from the new lows in trading volume for market makers, there are no buy or sell orders on the order book, causing prices to naturally decline slowly. Good news goes unheeded, and the buy orders on exchanges are only from bots for thirty seconds; once new coins are listed, they start to decline. Whether up or down, the cycles of altcoin markets have shortened significantly; if you can't catch it, it's time to clock out."