Bitcoin breached the critical $73,000 support level for the first time in months on Thursday, driven by fresh U.S. military strikes on Iran that precipitated a broad sell-off in risk assets. The asset traded at $72,978 during Asian hours, marking a 3.4% decline over 24 hours and a 6.3% drop over the preceding seven days after touching an intraday low of $72,912. This sharp correction extended across the broader market, with Ether (ETH) falling 4.2% to $1,976 and losing the psychological $2,000 threshold, while Solana (SOL) dropped 3.5% to $80.57. XRP slid 3.6% to $1.28, and Dogecoin lost 3.2% to $0.0979. Amidst the widespread decline, Hyperliquid (HYPE) remained the only major asset to retain a weekly gain, sitting up 2.4% over seven days despite a 4.5% daily loss, while Tron (TRX) held a 1.9% weekly increase.

The price action flushed heavily leveraged positions, resulting in one of the year's most significant liquidation events. Data compiled by Woofun AI shows total liquidations reached $958.8 million over 24 hours across 167,706 traders, with long positions accounting for $897 million of the flush compared to $61 million from shorts. Bitcoin liquidations led the cascade at $386 million, followed by Ether at $246 million. The largest single liquidation order recorded was a $15.34 million BTC position on Hyperliquid. This 93% long-skew during a near-billion-dollar flush indicates that traders were aggressively positioned for a recovery, only to be caught offside when the market reversed direction, clearing leverage built up through the mid-May range in a single session.

The catalyst for this volatility originated in the Middle East, where U.S. Central Command executed airstrikes on an Iranian military site near the Strait of Hormuz. The operation included the interception of four one-way Iranian attack drones fired at a commercial ship, with a U.S. official characterizing the action as defensive and necessary to maintain the ceasefire initiated last month.

Concurrently, the U.S. Treasury imposed new sanctions on Iran's Persian Gulf Strait Authority, accusing the entity of extorting vessels transiting the strategic waterway. In response, reports citing the Islamic Revolutionary Guard Corps indicated that Iran targeted the American airbase from which the strikes originated.

Regional tensions escalated further as Kuwait stated it was responding to hostile missile and drone threats, with its army warning that explosions detected within the country were air defense systems intercepting incoming targets. President Donald Trump addressed the situation during a cabinet meeting at the White House, asserting that no single nation would control the waterway. He emphasized that the strait constitutes international waters and must remain open to all, adding that the U.S. would actively watch over the region. Woofun AI notes that this geopolitical stance directly influenced market sentiment, as the threat of prolonged conflict undermined the stability previously assumed by investors.

Risk assets retreated across the board following the escalation. The MSCI All Country World Index fell 0.4% from a record high, while a gauge of Asian shares dropped 1.7%. Futures for the S&P 500 and Nasdaq 100 also pointed lower, reflecting a broad risk-off sentiment. Conversely, oil prices climbed as the strikes clouded the outlook for a diplomatic deal to reopen the strait, highlighting the immediate impact of supply chain fears. The reaction demonstrated how rapidly the ceasefire optimism that had been building over recent weeks unwound, shattering the market's resilience to previous headlines.

Crypto markets had previously maintained their range through several weeks of Iran-related news, with Bitcoin staying above $74,000 even as ETF demand cooled.

However, Thursday's strikes broke that floor, and the speed of the liquidation cascade suggests traders were caught leaning the wrong way. Woofun AI analysis suggests that the market's inability to absorb this specific geopolitical shock indicates a fragility in current leverage structures, where any deviation from the expected narrative triggers immediate and severe deleveraging. The event serves as a stark reminder of how external macro shocks can override technical support levels in highly leveraged environments.