Bitcoin drops below $77,000 as US-Iran strikes trigger $200M liquidations

Bitcoin dropped below $77,000 on Aug. 31 as US-Iran strikes resumed, triggering more than $200 million in crypto liquidations within an hour, Coinglass data shows. The largest cryptocurrency traded at $76,996 on the Binance USDT market, down 3.3 percent over 24 hours.

The move extended a volatile week for Bitcoin, which touched a 15-week high of $81,500 on Aug. 28 before a hawkish Federal Reserve speech and now renewed geopolitical risk reversed the rally. Fed Chair Kevin Warsh's Jackson Hole address on Aug. 28 had already pushed the token from about $80,000 to below $77,000 before a partial recovery to near $78,000.

Total crypto market capitalization contracted to about $2.71 trillion, down roughly 3 percent, with Bitcoin dominance holding near 57.6 percent. Ethereum fell about 3 percent to $2,440, while Solana dropped nearly 5 percent to $104. Spot trading volume across exchanges reached $41.5 billion in the past 24 hours.

The $77,000 level had acted as psychological support, and its breach opens the door to a test of $75,000, with $72,000 the next floor. Resistance sits at $78,500 and $80,000.

$200 Million in Longs Wiped Out in an Hour

Coinglass data shows more than $200 million in long positions were liquidated across major exchanges within an hour of the drop, as the sudden move caught leveraged traders off guard. The liquidation cascade accelerated the sell-off, with forced selling feeding further downside.

Bitcoin's market capitalization fell to about $1.56 trillion, while the token's dominance over altcoins remained above 57 percent, indicating the sell-off was broad rather than concentrated in any single asset. Ethereum and Solana tracked Bitcoin lower, while XRP slipped below $1.40 after peaking near $1.70 earlier in the week.

Geopolitical Risk Compounds Fed Hawkishness

The resumption of US-Iran strikes adds a geopolitical layer to an already cautious macro backdrop. Just days earlier, Warsh struck a hawkish tone on inflation at Jackson Hole, lifting expectations of a September rate hike and pressuring risk assets including Bitcoin. Higher interest rates make yield-bearing bonds more attractive and tend to pull liquidity away from crypto.

Jim Ferraioli, director of crypto research and strategy at Charles Schwab, said the pullback was tied to a positioning reset after a short squeeze last week left the market less leveraged. He noted that liquidations of levered futures can explain a large share of Bitcoin's daily price moves, leaving less fuel for further forced selling.

For traders, the immediate focus is whether Bitcoin can reclaim $77,000 or whether a sustained break below points to a deeper correction toward $75,000. The geopolitical situation remains fluid, and any de-escalation could trigger a sharp rebound, while further escalation risks additional downside.

This article is for informational purposes only and does not constitute investment advice.