Tensions in the Strait of Hormuz escalate, and Bitcoin’s risk-off selloff slams it down to $61.7k

By Forbes

Compiled by AididiaoJP, Foresight News

On Monday, July 13, the price of Bitcoin saw a clear pullback, as global financial markets collectively shifted into risk-off mode due to the latest geopolitical tensions in the Strait of Hormuz. Intertwined with other macro factors, the event created significant downward pressure on the price of the digital asset Bitcoin, causing market sentiment to cool rapidly.

According to real-time data from Coinbase on the TradingView platform, the price of this globally most valuable digital currency briefly fell to around $61.7k. Earlier in the day, Bitcoin had briefly approached a high near $64.4k, but ultimately narrowed its gains and turned to losses, dropping about 4% for the full day.

This volatility also mirrored broader stock market performance: major US benchmarks such as the S&P 500 Index and the Dow Jones Industrial Average fell on the day as well, indicating that investors' overall risk appetite was weakening.

Several market analysts, in interviews, pointed out that this Bitcoin price adjustment was not an isolated event, but a direct reflection of changes in the global macro environment. Roy Kashi, co-founder and CEO of Falconedge, analyzed in an email comment: “Bitcoin’s recent weak performance mainly stems from risk-off sentiment broadly prevailing across global markets.”

He further explained that intensifying tensions between the US and Iran not only pushed up international oil prices, but also reignited market concerns about inflation, while reducing expectations that the Federal Reserve would cut rates in the near term. Against this backdrop, investors tend to reduce exposure to risk assets including Bitcoin, and instead seek safer havens.

Tal Fromchenko, founder and CEO of Leveraged, also expressed a similar view and added more specific triggers. He said: “The pullback to around $62k was mainly driven by the escalation of tensions between the US and Iran in the Strait of Hormuz, which sparked a broader sell-off across risk assets.

At the same time, inflows into exchange-traded funds from institutions slowed down, and after Bitcoin failed to break through a key resistance level on Friday, it also triggered large forced liquidations of leveraged long positions. Even so, Fromchenko remained optimistic, emphasizing: “This is just a typical macro-driven shakeout within a healthy multi-year market cycle. Bitcoin’s overall growth-structure trajectory remains intact, and the long-term uptrend hasn’t changed.”

Himanshu Sahay, co-founder and Chief Technology Officer of Arch crypto lending platform, interpreted the move from the angles of market psychology and liquidity. In an email, he noted: “I don’t think this drop was caused by a single event. More likely, it’s the combined result of market macro sentiment, positioning, and liquidity conditions—which often can change rapidly within a short period.”

Sahay reminded investors not to overinterpret short-term volatility. He believes Bitcoin often experiences abrupt price swings during periods of higher volatility, and that the future direction will still depend on how macroeconomic conditions evolve and how investor confidence gradually rebuilds.

Saeed Al-Marri, CEO of Ethra Invest, focused on technical factors and the key data expected to be released. He analyzed: “From a technical standpoint, what we’re seeing now looks more like a wave of position liquidations than the market losing confidence in Bitcoin. When many traders use leverage to go long—borrowing money to bet on price increases—any price drop can hit their loss threshold, forcing exchanges to automatically close those positions.

He specifically mentioned that the liquidation frequency of long positions is six times that of short positions (6 to 1), clearly indicating that what’s being cleared is mainly bullish bets, not investors exiting Bitcoin en masse.”

Al-Marri further emphasized the macro-level impact: “The bigger driver is the US Consumer Price Index expected to be released this Wednesday—i.e., inflation data. If the data comes in higher than expected, it would further delay hopes for Federal Reserve rate cuts. A higher interest-rate environment makes relatively safer assets like bonds and cash more attractive, putting pressure on volatile assets like Bitcoin.”

He concluded: “The real core story right now isn’t that Bitcoin itself has suffered a structural breakdown, but that the entire market is holding its breath, waiting for guidance from that key number—the Consumer Price Index.”

Overall, this Bitcoin price pullback reflects the immediate impact of geopolitical uncertainty on global risk appetite. However, multiple institutional analysts believe this falls within the normal range of market adjustment and has not changed Bitcoin’s fundamental nature as a long-term growth asset. While watching short-term volatility, investors also need to closely track this week’s US inflation data and further developments in the geopolitical situation in order to better grasp the market’s direction next.