Strait of Hormuz Tensions Escalate, Bitcoin Plummets to $61,700 Amid Safe-Haven Sell-Off

By: Forbes

Compiled by: AididiaoJP, Foresight News

On Monday, July 13, Bitcoin prices saw a significant pullback as global financial markets collectively shifted into risk-off mode due to the latest geopolitical tensions in the Strait of Hormuz. This event intertwined with other macro factors, creating significant downward pressure on the price of the digital asset Bitcoin, causing market sentiment to cool rapidly.

According to real-time data from Coinbase on the TradingView platform, the price of this world's most valuable digital currency once fell to around $61,700. Earlier in the session, Bitcoin briefly approached a high of $64,400, but ultimately narrowed gains and turned negative, closing down about 4% for the day.

This volatility also echoed broader stock market performance: major U.S. stock benchmarks such as the S&P 500 Index and the Dow Jones Industrial Average also declined that day, indicating that overall investor risk appetite is weakening.

Multiple market analysts pointed out in interviews that this Bitcoin price adjustment was not an isolated event, but a direct reflection of changes in the global macro environment. Roy Kashi, Co-founder and CEO of Falconedge, analyzed in an email comment: "Bitcoin's recent weak performance mainly stems from the risk-off sentiment prevalent in global markets."

He further explained that escalating tensions between the United States and Iran not only pushed up international oil prices but also reignited market concerns about inflation, while reducing investor expectations for a Fed rate cut in the near term. In this context, investors tend to reduce exposure to risk assets, including Bitcoin, and turn to safer havens instead.

Tal Fromchenko, Founder and CEO of Leveraged, also expressed a similar view and added more specific triggering factors. He stated: "The price pullback to near $62,000 was mainly affected by the escalation of tensions between the United States and Iran in the Strait of Hormuz, which triggered a broader sell-off in risk assets.

At the same time, institutional inflows through exchange-traded funds slowed down, and after Bitcoin failed to successfully break through key resistance levels on Friday, it also triggered forced liquidations of a large number of leveraged long positions." Despite this, Fromchenko remained optimistic, emphasizing: "This is just a typical macro-driven shakeout within a multi-year healthy market cycle; Bitcoin's overall growth structure trajectory remains intact, and the long-term upward trend has not changed."

Himanshu Sahay, Co-founder and Chief Technology Officer of Arch crypto lending platform, offered an interpretation from the perspective of market psychology and liquidity. He pointed out in an email: "I believe this decline was not triggered by a single event, but is more likely the result of a comprehensive market reaction to macro sentiment, positioning, and liquidity conditions, and these factors can often change rapidly within a short period."

Sahay reminded investors not to overinterpret short-term volatility; he believes Bitcoin has historically often seen sharp price moves during periods of high volatility, and future trends will still depend on the evolution of macroeconomic conditions and the gradual rebuilding of investor confidence.

Saeed Al-Marri, CEO of Ethra Invest, focused on technicals and upcoming key data. He analyzed: "From a technical perspective, what we are seeing now looks more like a wave of liquidations rather than the market losing confidence in Bitcoin. When a large number of traders use leverage to go long—that is, borrowing money to bet on price increases—any price drop can hit loss thresholds, forcing exchanges to automatically liquidate these positions."

He specifically mentioned that long positions are currently being liquidated six times more frequently than short positions (6 to 1), which clearly indicates that what is being cleared are mainly bullish bets, rather than investors exiting Bitcoin on a large scale.

Al-Marri further emphasized the macro-level impact: "The bigger driving factor lies in the U.S. Consumer Price Index, that is, inflation data, scheduled for release this Wednesday. If the data comes in higher than expected, it will further delay hopes for a Fed rate cut, and a higher interest rate environment will make relatively safe assets like bonds and cash appear more attractive, thereby putting pressure on volatile assets like Bitcoin."

He summarized: "The real core story right now is not a structural breakdown in Bitcoin itself, but rather that the entire market is holding its breath waiting for guidance from the key number of the Consumer Price Index."

Overall, this Bitcoin price pullback reflects the immediate impact of geopolitical uncertainty on global risk appetite, but multiple institutional analysts believe this falls within the scope of normal market adjustments and has not changed the fundamental attribute of Bitcoin as a long-term growth asset. While paying attention to short-term volatility, investors also need to closely track this week's U.S. inflation data and further developments in the geopolitical situation to better grasp the subsequent market direction.