Bitcoin Falls Below $71,000 as Market Sees Widespread Liquidation and Heightened Geopolitical Risk

Bitcoin's Price Plunges to $70,159, Recovers to $70,849 Amid Liquidations of $744 Million

Bitcoin's price took a sharp hit in early June 2 trade, plummeting to a low of $70,159 before recovering to $70,849 (09:07 IST) amid a wave of liquidations that approached $744 million. The collapse in price triggered a broader risk-off sentiment, forcing leveraged traders out of crowded positions.

152,000 Traders Liquidated in 24 Hours

According to Delta Exchange, over 152,000 traders were liquidated in the past 24 hours, with total liquidations near $744 million. This indicates that the move was driven not just by spot selling but also by aggressive leverage unwinding.

Read also: Bitcoin Price Sinks 6% Below $66,500 Amid ETF Outflows and Institutional Selling

Bitcoin Loses Key Support Zone

Research Analyst Riya Sehgal at Delta Exchange estimates that Bitcoin has lost the important $72,500–$73,000 support zone and is now hovering near the crucial $70,000 area. If this level fails to hold, the next downside pocket could emerge around $68,800–$68,500.

Geopolitical Uncertainty Drives Bitcoin's Pullback

Read also: Bitcoin's Inflation-Hedging Potential Erodes as Price Falls Below $70,000

Avinash Shekhar, Co-Founder & CEO of Pi42, believes that Bitcoin's pullback below the $71,000 level appears to be driven more by geopolitical uncertainty than a deterioration in crypto fundamentals. Escalating tensions between Israel and Hezbollah, along with continued uncertainty around a potential Iran deal, have pushed traders into a risk-off mode, triggering over $155 million in long liquidations.

Investors Should Watch ETF Flows, On-Chain Profitability, and US Macroeconomic Data

Shekhar believes that despite the sharp reaction, Bitcoin has not seen panic-driven selling. The market is currently searching for a new equilibrium after a period of elevated volatility, with participants reassessing rather than abandoning the assets altogether. Vikram Subburaj, CEO of Giottus, also emphasizes the importance of ETF flows, on-chain profitability, and incoming US macroeconomic data for investors.

Ethereum Faces Increasing Pressure

According to WazirX, Ethereum is facing increasing pressure, driven by structural changes within the ecosystem. Network activity has slowed significantly, and spot Ethereum ETFs have continued to see outflows, further increasing pressure on the network's valuation sustenance.