Bitcoin experienced a sharp sell-off on Wednesday, briefly dropping below the $62,000 level after President Donald Trump announced that the U.S.-Iran Memorandum of Understanding (MoU) is over.
The move erased recent gains and triggered nearly $450 million in cryptocurrency liquidations across the market.
According to real-time data from Binance, Bitcoin fell from around $62,941 to as low as $61,926 within a short window following the news. The decline represented a roughly 1.5-2% drop in minutes, highlighting the market’s continued sensitivity to U.S. foreign policy statements.
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The MoU, signed in mid-June 2026, marked a significant diplomatic effort mediated with support from countries including Pakistan, Qatar, Saudi Arabia, and Turkey.
Key elements reportedly included reopening the Strait of Hormuz to maritime traffic and extending a ceasefire, which helped ease oil supply concerns and boosted risk assets at the time.
Bitcoin and broader crypto markets had rallied on the initial peace signals, with BTC climbing above $66,000 in the weeks following the announcement.
Long-term holders continued accumulating, while technical traders pointed to the breach of short-term resistance levels and successful defense of key support zones.
Some market participants highlighted the move as a classic “fakeout” trap for shorts, with prices rebounding strongly after an initial Monday dip.
The Strait of Hormuz is a critical chokepoint for global oil shipments. Any disruption or renewed tensions there can spike energy prices, increase inflation fears, and prompt investors to reduce exposure to risk assets like stocks and cryptocurrencies.
Crypto traders have noted that Bitcoin often moves in tandem with equities and commodities during major geopolitical events rather than acting purely as a “digital gold” safe haven.
Following the recent decline in the price of Bitcoin, the crypto community reacted with a mix of frustration. Many users on X, pointed to repeated instances where Trump’s statements have coincided with market volatility. “Geopolitics is the new technical analysis,” one trader remarked.
Others expressed fatigue with comments like “Sad to see this starting all over again.” Some dismissed the move as short-term noise, predicting a quick recovery if tensions do not escalate further.
Larger accounts warned of continued liquidations if risk-off sentiment persists, while a few viewed the dip as a potential buying opportunity.
ING technical Analyst Roelof-Jan van Den Akker says Bitcoin recent rebound could prove limited and temporary. ING expects a resumption of Bitcoin’s previous downtrend with a break below the July 1 low in the near-term and towards $47,705.
He further warns investors to be mindful of implications of a weekly close below the crucial horizontal support level at $54,450.
However, despite forecasts of deeper corrections, Bitcoin’s ability to reclaim $64,000 has shifted sentiment, with several analysts now discussing targets in the $65,000–$70,000 range if momentum holds.
The sell-off extended beyond Bitcoin. Ethereum, Solana, XRP, and other major tokens also posted losses. Traditional markets showed similar caution, with oil prices ticking higher on renewed uncertainty.
This event comes amid ongoing discussions about U.S. fiscal policy, Federal Reserve actions, and institutional crypto adoption.
The coming hours and days will be critical. Traders are watching for any follow-up statements from the White House or Iranian officials. A full breakdown of the MoU could lead to higher volatility, while de-escalation signals might support a rebound.
As always in crypto, external macro and geopolitical forces remain dominant drivers. Investors are advised to manage risk carefully and stay informed on both on-chain data and global headlines.