Spurred by escalating geopolitical tensions between the US and Iran in the Middle East, global risky assets face broad sell-offs, triggering a drastic plunge across the crypto market. Bitcoin tumbled over 7% intraday and slipped below $62,000 to its lowest since February, alongside deep losses for Ethereum, BNB, Solana and ADA. Per CoinGlass data, over 283,600 global investors got liquidated within 24 hours with total losses hitting $1.738 billion; long-position liquidation accounted for over 80% of the sum, and the single largest liquidation order reached nearly $59.67 million amid rampant market panic.

Multiple bearish factors jointly dragged down crypto prices, and a tiny token sell from crypto giant Strategy dealt a heavy blow to market confidence. Long known for its permanent Bitcoin accumulation strategy with over $56 billion BTC holdings, Strategy only offloaded 32 Bitcoins worth $2.5 million, yet the trivial sale broke Michael Saylor’s years-long commitment of never selling BTC. Investors started questioning large holders’ strategies; Strategy’s own stock lost 18% weekly, and leveraged ETFs tracking its share price swung wildly, creating a vicious loop of falling stocks, fund redemptions and continuous crypto sell-offs, wiping out over $170 billion from Bitcoin’s market cap this week.

Global equity markets also retreated on worsening risk sentiment. Japan’s Nikkei 225 fell 1.90% and South Korea’s KOSPI dipped 1.45%, with SoftBank, LG Electronics, SK Hynix and Samsung Electronics posting steep declines; US index futures slid as well, while Micron, Broadcom, AMD and Intel slumped in overnight US trading.

A prominent capital rotation is underway: massive funds flee crypto for AI-related equities. The Nasdaq 100 has surged 41% in the past 12 months while Bitcoin lost 38%, marking complete performance divergence. Asset managers shift holdings from digital assets to AI stocks, and many crypto firms pivot their business: K Wave scrapped a $500 million Bitcoin purchase plan for AI data center investment, and crypto miner Bitdeer liquidated all BTC reserves to fund high-performance computing expansion. US spot Bitcoin ETFs recorded outflows for 12 straight trading days with nearly $4 billion withdrawn, setting a historic outflow record and limiting Bitcoin’s rebound potential.

Investors closely monitor the key support around mid-$60,000; analysts warn a break below this level would trigger deeper corrections. With persistent capital outflow to AI and recurring Middle East risks, the crypto market is set to stay weak in the short run.