At three in the morning, my phone notifications suddenly buzzed densely—"US-Israel joint action," "Iran attacked." Almost reflexively, I opened the market app, my finger hovering above the screen, my heart racing a few beats faster than usual. This wasn't my first experience of such a "wartime moment," but each time I see the K-line chart heavily fluctuating under the impact of news, the adrenaline rush feels as real as ever.
In the past 24 hours, Bitcoin has undergone a classic "geopolitical stress test." The price experienced a roller coaster between $64,000 and $68,000, with over $100 million in long leveraged positions being liquidated within 15 minutes. Interestingly, this pattern of volatility reminded me of the scenes when the Russia-Ukraine conflict erupted in February 2022—it was the same: a sharp decline followed by a rapid rebound, then entering a sustained oscillation.
But this time is somewhat different.
From "digital gold" to "risk asset": The Bitcoin narrative is fracturing
In traditional cognition, Bitcoin is often likened to "digital gold," theoretically supposed to play a hedging role during turbulent times. However, based on the real-time data I observed, Bitcoin's performance at the start of this event resembled that of Nasdaq tech stocks—first down as a formality.
Why is there this "narrative divergence"? I believe the core lies in the structural changes among market participants.
Before 2020, Bitcoin holders mainly consisted of long-term believers (HODLers) and retail investors, who reacted relatively slowly to geopolitical events. But now, with the approval of Bitcoin spot ETFs, substantial funds from traditional financial institutions have entered the market. The managers of these funds have strict risk control models, and any event that could trigger a chain reaction in global markets would activate their "deleveraging button."
I checked the on-chain data from several major exchanges and found that within the first hour after the news broke, over 30,000 Bitcoins were transferred from institutional custody wallets to exchanges—usually a precursor to selling. Meanwhile, gold prices rose by about 1.2% during the same period. This divergence clearly tells us: in the eyes of traditional fund managers, Bitcoin's "risk asset" label temporarily overshadowed its "safe-haven asset" halo.
The "double-edged sword" of leverage: How liquidation waves amplify volatility
"In 15 minutes, over $100 million in long positions were buried." This figure reflects the current high-leverage ecosystem in the crypto market.
Based on the latest data, the open interest in cryptocurrencies across the network remains at historically high levels, with Bitcoin's futures open interest exceeding $30 billion. In this environment, any sudden news could trigger a chain liquidation.
I recall during the May 19, 2021 crash, a similar chain liquidation caused Bitcoin to drop 30% in a single day. Although the magnitude this time was smaller, the mechanism was entirely the same: price declines → triggering some long liquidations → forced selling exacerbates the decline → more positions triggered → forming a negative feedback loop.
Interestingly, after this wave of liquidations, the market quickly saw "bottom-fishing capital." According to on-chain data, when Bitcoin dropped to around $63,000, several addresses marked as "whales" began to make large purchases, with individual transactions often ranging from 500 to 1,000 Bitcoins. These buyers seemed to view the drop triggered by geopolitical conflict as a "discount opportunity."
A friend working at a crypto hedge fund privately told me: "Our model shows that as long as the conflict does not escalate into a full-scale war, this event-driven drop usually recovers more than half of its decline within 24-48 hours. We set automatic buy orders below $64,000 yesterday."
Monday's Opening: The real test is about to come
Now, the most concerning question in the market is: after the US stock market opens on Monday, how much redemption pressure will Bitcoin ETFs face?
Currently, the total assets under management of Bitcoin spot ETFs have exceeded $60 billion, most of it coming from traditional investors. These investors typically hold stocks, bonds, and cryptocurrencies simultaneously, making their asset allocation decisions more interlinked.
Based on my experience, if the US stock market opens significantly lower on Monday due to risk-averse sentiment, some investors may choose to "sell the most liquid assets" to meet margin requirements or reduce overall risk exposure. Bitcoin ETFs, due to their high liquidity and relatively new positions, are likely to become the targets for prioritizing reductions.
A noteworthy leading indicator is the fund flow of Grayscale GBTC. As the largest Bitcoin trust fund, GBTC has seen net outflows for several consecutive days. If its outflow accelerates on Monday, it may put pressure on the entire Bitcoin ETF sector.
However, there is also a contrary logic. If the conflict leads to a deterioration in dollar credit (even if only a short-term psychological impact), some funds may accelerate the flow from the traditional system into cryptocurrencies. This game is at the core of the current market divergence.
Technical observations: Where are the key supports and resistances?
Setting aside the news, purely from a technical analysis perspective, Bitcoin is currently in a delicate position.
On the daily chart, the $60,000-62,000 region is an important psychological and technical support zone. Not only is it a low point from multiple previous pullbacks, but it's also the average cost zone for many long-term investors. A drop below this range could trigger broader sell-offs.
Above, $70,000 serves as a strong resistance level. Bitcoin has attempted to break this level three times in the past two months, all of which ended in failure, forming a clear "triple top" pattern. This geopolitical conflict has, in fact, made it more difficult to break through $70,000.
In my personal observation framework, there is a simple indicator: the correlation between Bitcoin and the Nasdaq 100 index. Recently, this correlation coefficient has remained above 0.7 (1 being perfectly correlated). This means that as long as tech stocks are under pressure, Bitcoin will find it difficult to stand alone.
History does not repeat itself simply, but it does rhyme
With each geopolitical conflict, the market looks for historical references. The most frequently mentioned is the performance during the 2022 Russia-Ukraine conflict.
However, there is one key difference this time: the monetary policy environment is entirely different.
In early 2022, the Federal Reserve had just begun to raise interest rates, and market liquidity was still abundant. Currently, although a rate cut cycle may be approaching, interest rates are still at a 20-year high, and global liquidity is overall tight. In this environment, the "resilience" of risk assets will be relatively weak.
Another difference is Bitcoin's own cyclical position. In 2022, Bitcoin was at the beginning of a bear market, having already fallen from its peak. Currently, Bitcoin has just undergone a halving and is supposed to be in a rising channel from a cyclical perspective. The collision of these two cyclical forces makes predictions particularly difficult.
What should ordinary investors do now?
If you ask me about my personal strategy, I would share the following thoughts:
Reduce leverage: In times of extreme uncertainty, high leverage is tantamount to suicide. I have liquidated all contract positions and retained only spot.
Build positions in batches: Don't try to bottom fish all at once. If you are optimistic about the long term, you might consider setting up a laddered buying plan, such as buying a portion every 5% decline.
Pay attention to alternative narratives: Geopolitical conflicts may accelerate the discussion of "de-dollarization," which is actually positive for Bitcoin's long-term narrative. However, in the short term, it needs to digest the emotional shock first.
Prepare for the worst: Ask yourself a question: If Bitcoin falls to $50,000, can my portfolio still withstand it? Adjust positions based on the answer.
Finally, I want to say that the five most expensive words in investing are "this time is different." Yet in every crisis, the most lucrative opportunities are often hidden behind those five words. The 2018 trade war, the 2020 pandemic, the 2022 war... every time the market is in panic, those who remain calm and make decisions based on long-term logic ultimately reap substantial rewards.
The current market volatility, rather than being a "stress test" for Bitcoin, is more of a test of investors' mentality. Black swans in geopolitics will never disappear, but Bitcoin has been operating for 15 years, enduring countless "end-of-the-world" prophecies, and continues to move forward.
After Monday's opening, the market may provide us with clearer answers. But regardless of how prices fluctuate in the short term, I still believe that a global, censorship-resistant, scarce digital asset's long-term value logic is being reinforced rather than weakened in this increasingly divided world.
Of course, this is just my personal observation and thought. The market is always full of surprises, and your investment decisions should be based on your own research and risk tolerance. If missiles continue to fly tonight, perhaps tomorrow we will face a whole new market situation. That is cryptocurrency investing—always thrilling, never boring.
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