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Bitcoin (BTC) dropped below $73,000 on Thursday after renewed military action between the United States and Iran triggered a broad sell-off across cryptocurrencies, equities, and other risk-sensitive assets. The move coincided with one of the largest single-day spot Bitcoin exchange-traded fund (ETF) outflow events of the year, led by BlackRock’s iShares Bitcoin Trust (IBIT), which lost nearly $528 million in net withdrawals.
The sell-off accelerated during Asian trading hours after reports confirmed additional US strikes on Iranian military targets near the Strait of Hormuz, a key global oil transit route. Bitcoin fell as low as $72,782, according to market data, while Ether (ETH) slipped below the closely watched $2,000 level for the first time in weeks.
Bitcoin had held above $74,000 through several weeks of Middle East headlines and slowing ETF inflows, making Thursday’s breakdown one of the market’s sharpest reversals since April.
Positioning across derivatives markets suggested many traders were still expecting Bitcoin to reclaim higher levels before Thursday’s sell-off accelerated.
Data from CoinGlass showed nearly $959 million in crypto positions were liquidated over the past 24 hours. Long positions accounted for roughly $897 million of the liquidations, while short liquidations totaled about $61 million. Bitcoin alone represented around $386 million in forced liquidations, followed by Ether at roughly $246 million.
The imbalance suggests many traders were still positioned for continuation above the $74,000-$75,000 range that had held through much of May.
The largest single liquidation reportedly involved a Bitcoin position worth more than $15 million on Hyperliquid. The broader crypto market also lost significant value during the move, with total market capitalization dropping by roughly $80 billion within a day, according to multiple market trackers.
Several major altcoins also posted steep declines. Solana (SOL) traded near $80, XRP (XRP) slipped toward $1.28, and Dogecoin (DOGE) fell below $0.10 as traders reduced exposure across higher-volatility assets.
Spot Bitcoin ETF flows added another layer of pressure to the market decline.
According to SoSoValue data, the 11 US-listed spot Bitcoin ETFs recorded combined net outflows of about $733 million on Wednesday. BlackRock’s IBIT accounted for the majority of the withdrawals, posting $527.84 million in net outflows, its second-largest daily redemption since launch.
JUST IN: BlackRock clients sell $527.82 million worth of $BTC.
Largest outflow since inception. pic.twitter.com/LPy3EMAtJq
— Whale Insider (@WhaleInsider) May 28, 2026
The withdrawal came only days after a reported $1.29-billion dark-pool block trade involving IBIT shares. While block trades don’t necessarily translate into immediate ETF redemptions, the sequence of events strengthened concerns that larger investors have started trimming exposure as macro conditions deteriorated.
Fidelity’s FBTC and Grayscale’s GBTC also recorded sizable outflows, extending a broader two-week trend that has removed more than $2 billion from spot Bitcoin ETFs.
ETF demand played a major role in Bitcoin’s rally earlier this year, particularly during March and April when steady inflows absorbed market supply and supported Bitcoin’s push above $80,000. The recent reversal suggests institutional buyers have become more defensive as geopolitical risks and inflation concerns intensify.
The crypto sell-off unfolded alongside a wider retreat across global markets.
Brent crude climbed back above $97 per barrel after the latest US strikes raised fears of disruption around the Strait of Hormuz, which handles a large share of global oil shipments. Asian equity markets also weakened sharply, with major indexes in Japan, South Korea, and Taiwan falling during Thursday trading.
Rising oil prices added another inflation risk at a time when traders were already reassessing expectations for future US Federal Reserve rate cuts.
Bitcoin has often traded like a high-beta technology asset during periods of macro stress despite its long-term narrative as a hedge against monetary instability. That pattern appeared again during the latest geopolitical escalation, with investors rotating toward traditional defensive assets while reducing exposure to cryptocurrencies and higher-risk assets.
The decline also interrupted the market optimism that followed reports earlier this week suggesting progress toward negotiations involving Iran and regional shipping access. That optimism faded quickly after fresh military developments and renewed sanctions from the US Treasury.
The Bitcoin Fear and Greed Index dropped into “extreme fear” territory, reflecting growing investor caution after weeks of weakening momentum. Bitcoin has now fallen more than $9,000 from its May high above $82,000, while ETF accumulation has slowed sharply compared with earlier this year.
NOW: Bitcoin Fear & Greed Index hits 25, Extreme Fear territory. pic.twitter.com/acLNfqabc1
— Crypto Rover (@cryptorover) May 28, 2026
Several market reports tied the ETF outflows to institutional de-risking and basis-trade unwinds rather than outright long-term bearish positioning. Previous ETF outflow streaks during this cycle later reversed after broader market volatility eased.
At the same time, the recent price action has exposed underlying weakness in market positioning. Bitcoin managed to hold above $74,000 through several earlier Iran-related headlines, but Thursday’s breakdown triggered aggressive selling once key support levels failed.
The next major zone traders are watching sits near $70,000, an area several market participants have identified as a potential higher-timeframe support level after Thursday’s breakdown pushed Bitcoin toward levels last seen in mid-April.
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