A sharp correction swept through the cryptocurrency market over the weekend, with Bitcoin and major altcoins shedding significant value. The downturn was primarily triggered by renewed geopolitical uncertainty in the Middle East and a wave of profit-taking following a strong rally.
Bitcoin's price dropped from a recent peak near $78,400 to around $75,000, a decline of over $3,000. This pullback erased gains made earlier in the week when prices climbed from below $70,500 to a 10-week high on optimism surrounding reported diplomatic progress between the United States and Iran. The initial rally was fueled by Iran's decision to briefly reopen the Strait of Hormuz, which led to a drop in crude oil prices and cheered risk assets.
However, sentiment reversed sharply on Saturday after Iran announced the Strait was closed again, causing crude oil futures to spike. This development introduced fresh volatility and uncertainty regarding the future of regional conflicts. Former President Donald Trump commented on the situation, stating a blockade against Iran would remain until the U.S. secured enriched uranium, adding to the mixed signals driving market anxiety.
The broader market followed Bitcoin lower. The total cryptocurrency market capitalization fell by approximately $100 billion to around $2.58-$2.62 trillion, a drop of about 2.5%. Bitcoin's market dominance, however, rose to 57.5% as altcoins suffered steeper losses.
Altcoins were hit particularly hard. Ethereum (ETH) declined 3.5% toward $2,300, while XRP fell below $1.43 and BNB retreated toward $620. Other major tokens like Solana (SOL), Cardano (ADA), and Dogecoin (DOGE) also recorded declines. The most severe losses were seen in mid-cap tokens that had recently rallied. RaveDAO (RAVE) crashed by over 95% in 24 hours, while Aave (AAVE) dropped more than 20% to around $92, partly due to reports linked to a KelpDAO hack. Other notable laggards included MemeCore, Siren, LayerZero, and Pi Network's PI token.
Analysts point to profit-taking as a key catalyst, noting that many of the day's top losers were last week's biggest gainers. Technically, Bitcoin is struggling to exit a bearish flag pattern on its charts, remaining below key moving averages. Some analysts warn of a potential deeper correction toward $68,000 if the pattern completes, which could trigger further selling across the industry.
