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The war in the Middle East is raging towards the cryptocurrency market, with oil as the catalyst
The source of this sell-off storm lies directly at the escalation of tensions in the Middle East. Iran's sudden threat to block the Strait of Hormuz, the "sea lifeline" that carries 20% of global oil transportation, would have unimaginable consequences if it were to close.
JPMorgan warns that the strait blockade could push oil prices up to $130 per barrel, which could push US inflation back to 5% - the highest level since March 2023. Traders quickly responded by reassessing the direction of interest rates and withdrawing high-risk speculative assets such as cryptocurrencies on a large scale. Although Bitcoin is often touted as an anti inflation tool, its actual performance is more like that of a high beta tech stock - Kaiko data shows that the correlation between Bitcoin and the Nasdaq index has sharply increased recently.
Institutional retreat, ETF funds flow into cliff like decline
The retreat signals from institutional investors are equally alarming. From the perspective of fund flow, the inflow of funds into Bitcoin spot ETFs has shown a cliff like decline: there were over 1.04 billion US dollars in inflows in the first three days of last week, which directly returned to zero on Thursday, and only 6.4 million US dollars remained on Friday.
This sudden change coincides with Trump's early departure from the G7 meeting and the announcement of the launch of a two-week Iran policy review. The close linkage between political decision-making and capital flows once again confirms the sensitivity of the cryptocurrency market to policy risks.
The technical aspect is also shrouded in clouds. Bitcoin has encountered a strong 'liquidity wall' in the $105000-106000 range, which is both a resistance level on the trend line and a high volume of orders in the early stages. Three failed attempts: Bitcoin has hit $106000 three times this month - * Three failed attempts: Bitcoin has hit $106000 three times this month without success, forming a typical triple top suppression
Short placement of moving averages: Prices consistently remain below all key moving averages (20/50/100/200 day EMA), forming a bearish pattern
Oversold rebound difficult to sustain: Although the 4-hour Relative Strength Index (RSI) triggered a rebound after touching the oversold area, the fund flow indicator is still deeply trapped in the negative area, indicating a lack of financial support for the rebound
The leverage ghost behind the 500 million liquidation
When the price of Bitcoin suddenly broke through the key support of $103000, a brutal clearing storm erupted in an instant. The CryptoQuant heatmap clearly shows that there were originally a large number of highly leveraged long positions clustered around $103000, but when the price fell below that level, these positions collapsed like a domino effect.
On the Binance exchange, long positions were liquidated by over $160 million in just a few minutes. What is even more alarming is that Binance's Net Taker Volume plummeted to negative $100 million at one point - the third time this month that such extreme capital outflows have occurred. Although such drastic liquidation brings short-term pain, it also has the effect of clearing up speculative foam. When excessive leverage is forcibly cleared, the market may usher in a healthier rebound foundation. As Bitcoin oscillates around $101000, all eyes are focused on the upcoming June 27th option expiration date. Deribit data shows that there is a huge holding of put options with an exercise price of $100000. If the price fails to quickly recover $105000, bears may launch a new round of attacks.
Operation suggestion:
BTC 98000 long. First target: 101200. Second target: 102300
ETH 2180 long first target to view 2260 second target to view 2320
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Disclaimer: The above content only represents the author's personal opinion and is for communication and sharing purposes only. It does not represent the position or viewpoint of AiCoin and does not constitute any investment advice. Based on this investment, there may be external contacts, which have nothing to do with AiCoin, and the consequences shall be borne by oneself.
