The market capitalization of cryptocurrencies takes a hard hit by pulling back for the second consecutive day, sitting at $2.19T after posting losses of 1.76% and a plunge of over $39B. This bearish move directly responds to the escalating attacks between the United States and Iran in the Strait of Ormuz, which pushes crude oil above $92, strengthens the dollar, and triggers inflation alarms regarding the Federal Reserve’s next moves.
The Ghost of Inflation: Oil Spikes and Drags Down the Dollar
Geopolitics dictate the pulse of risk assets once again. The resumption of hostilities in the Middle East drives oil prices nearly 31% above the previous levels recorded at the beginning of the month. This energy shock instantly revives widespread inflation fears, catching investors off guard who bet on an economic truce.
As a chain reaction, the US dollar index catapults to 101.3 on Thursday—its highest level in roughly three weeks—fueled by expectations that the Federal Reserve will face pressure to adopt a much more hawkish stance. Currently, markets price in a probability exceeding 33% of a rate hike next week, while the probability of a September increase jumps to 78%, up from 61% the previous day.
10-Year Treasury Yields on Fire and the Impact on Digital Assets
Pressure on sovereign debt hits instantly. The yield on 10-year US government bonds climbs to 4.70%, touching its highest level since January 2025. To put it into perspective, bond yields rise by 30.70 basis points over the past 4 weeks, accumulating a 29.60 basis point increase over the last 12 months.
This bond yield attracts capital toward traditional safe havens, strips away the appeal of cryptocurrencies, and unleashes a wave of massive liquidations across exchanges.
X-Ray of Liquidations and Current Crypto Market Prices
The impact on derivatives and major tokens hits immediately, reflecting a deep shakeup in trader positions:
Total Liquidations: The global liquidation volume over the past 24 hours hits $252.34M, with an overwhelming predominance of long positions liquidated totaling $187.87M versus $64.47M in short positions.
Exchange Impact: Binance tops the list with $102.42M in total liquidations ($76.12M in longs), closely followed by Hyperliquid with $56.16M and OKX with $33.12M.
Major Asset Performance:
Bitcoin (BTC): Trades at $64,729.44, recording a 1.70% pullback over the past 24 hours.
Ethereum (ETH): Sits at $1,878.35, with a 2.79% drop on the day.
Solana (SOL): Drops to $75.70, accumulating a 2.78% loss.
XRP: Stands at $1.10, recording a 3.46% bearish adjustment.
Dogecoin (DOGE): Experiences a steeper 5.16% pullback, trading at $0.06931.
In the short term, the crypto ecosystem finds itself in the eye of the macroeconomic hurricane. As long as the situation in the Strait of Ormuz remains unstable and the Federal Reserve maintains its hawkish rhetoric against inflation, market capitalization will face significant headwinds. Investors must exercise extreme caution amid high volatility induced by factors outside the crypto world.
Disclaimer: This article serves educational and informational purposes exclusively and does not constitute financial advice. Investments in cryptocurrencies and digital assets carry a high risk of loss; conduct your own research before making investment decisions.
Communications Professional. Crypto Enthusiast. Economic Journalist. Bitcoiner & Altcoiner.
