On May 28, the price of the leading cryptocurrency fell to $72,804, the lowest level since mid-April. The market reacted to news of new U.S. strikes on Iranian military sites.

Hourly chart of BTC/USDT on Binance. Source: TradingView.

At the time of writing, the coin's price had recovered to $73,013.

The second-largest cryptocurrency by market cap, Ethereum, dropped 4.7% in a day, trading at $1,984.

Hourly chart of ETH/USDT on Binance. Source: TradingView.

Over the past day, the total market capitalization of digital assets decreased by approximately $80 billion. The volume of liquidated positions reached $932.42 million.

Source: CoinGlass.

The cryptocurrency sentiment index fell to 22 points, indicating extreme fear.

Source: Alternative

Bitcoin at $70,000

Michael Kramer, founder of Mott Capital Management, warned of a potential decline in Bitcoin prices to $70,000. He stated that a significant liquidity withdrawal from the U.S. financial system would pressure the market.

From May 28 to June 4, the U.S. Treasury will conduct a series of settlements on debt obligations totaling around $150 billion.

Kramer noted that Bitcoin often serves as a leading indicator of liquidity. When the Treasury sells securities, funds shift from the banking system to Treasury accounts at the Federal Reserve, reducing the available capital for riskier assets.

Impact of Macroeconomic Data

Nick Rak, research director at LVRG Research, commented to Cointelegraph that investors are pricing in geopolitical risks and potential disruptions in oil supply.

He stated that during periods of uncertainty, Bitcoin and Ethereum continue to behave like high-risk assets. Traders are currently concerned about the escalation of the conflict, which could impact inflation and Federal Reserve policy. The negative trend is exacerbated by declining liquidity and forced liquidation of margin positions.

Amid the escalating conflict in the Middle East, energy prices have risen: WTI crude oil surpassed $92 per barrel, while Brent increased to $98.

It’s worth noting that on May 25, Bitcoin prices rose above $77,000 amid falling oil prices.