Crypto Market Dips as Israel-Iran Conflict Sparks Global Volatility Amid ETF Inflows Shrink

On Friday, the already turbulent cryptocurrency market was pushed to even greater volatility, as geopolitical tensions rose, and world markets answered to a potential conflict between Israel and Iran. At the time of writing, Bitcoin (BTC) was changing hands at just above $104,668, after recently touching $102,513 following the developing crisis being digested by market participants.

Altcoins followed the negative trend of the market. Ethereum (ETH) continued its decline, testing major support at the $2,500 mark, with Ripple (XRP) trading slightly above its crucial $2.09 support zone as buyers failed to assert themselves back into the driver’s seat in a trading environment that was getting progressively choppy.

This volatility was fuelled by a large-scale military action initiated by Israel against Iranian nuclear installations as well as missile developmental facilities and senior military officials. According to Reuters, Israeli Prime Minister Benjamin Netanyahu said the attacks were meant to stop the Iranian quest to develop nuclear weapons, as a matter of national security.

As a countermeasure, Iran launched about 100 drones targeting Israeli territory. In response, the Israeli military also engaged their defensive measures and announced a state of emergency, fearing possible further escalation.

The financial markets, including crypto, have felt the geopolitical shockwaves. Cryptocurrency market capitalization dropped by almost 3% to $3.4 trillion on Friday, down against $3.5 trillion on Thursday, CoinGecko data shows.

Spotlight on ETFs: Bitcoin, Ethereum Inflows Show Downtrend

The demand for investors in crypto-linked financial products was also starting to ease. The spot Bitcoin ETFs, which recorded large inflows earlier this month before Bitcoin hit a new high of $111,980 on May 22, are currently slowing down noticeably. SoSoValue data reported that spot BTC ETFs saw about $86 million in net inflows on Thursday, compared to the $165 million inflow on Wednesday and $431 million inflow on Tuesday.

Spot ETFs based on Ethereum went in the same direction. Thursday’s net inflows decreased to $112 million compared with $240 million on Wednesday. Ethereum ETF products have maintained positive flows and this is the 19th day of net inflows despite the weekly outflow.

This has further contributed to the geopolitical tension that is currently bedeviling the markets coupled with the decreased interest in spot ETFs which further increased market uncertainty as to how much longer the crypto market can sustain the external pressures before a more significant correction takes place.

Crypto Derivatives Market Rattled as Liquidations Surge; Bitcoin, Ethereum, XRP Face Key Technical Tests

The sudden decline in the market has shocked the investors with quite a number of them being rattled by the increased volatility levels. Traders have now been facing a very unpredictable environment, especially in the derivatives market where holders of long positions have eaten up massive losses.

Bitcoin (BTC) has experienced a significant spike in liquidations, and most of them were aimed at long (bullish) positions. The data provided by CoinGlass showed that more than $446 million worth of leveraged positions have been liquidated within the last 24 hours. Of that, longs made $423 million versus only $23 million in short liquidations as the price fell quickly one-sided purge.

The Open Interest (OI) in Bitcoin derivatives lowered by 4.6% to $69.8 million, indicating a decrease in active contracts. Meanwhile, the volume of trading soared by 54 percent to $135 million, indicative of both short covering and margin involuntary liquidations. The surge in traffic is as Bitcoin tries to consolidate above $105,000, gains of 2.5% since a local low of $102,513, a position that is supported by the 50-day Exponential Moving Average (EMA).

The Bitcoin market players are closely observing how the market will perform at the end of the day in terms of closing above the immediate support standing at $105,000. This could lessen the bearish influence and pave a possible way towards the $110,000 resistance area some 5% higher. However, sentiment remains fragile, with geopolitical risks looming large. The Relative Strength Index (RSI) has dipped below the neutral 50 mark, reflecting growing bearish momentum.

On the downside, key technical support levels for Bitcoin include the 50-day EMA at $102,513, the 100-day EMA at $98,161, and the 200-day EMA at $92,546.

Altcoins Face Mounting Pressure: Ethereum and XRP in Focus

Ethereum (ETH) is in the process of testing the bottom of its consolidation area at around $2,500. The 200-day EMA is plugging a buffer at $2,473 and the 100-day EMA is offering secondary support at $2,351. Nevertheless, the fact that the RSI is moving below the midline shows that bears still have an upper advantage. If investor caution remains in effect within the volatile background, an additional downside is likely, which may pull the RSI further toward the oversold territory.

However, as the support at $2,500 has not yet been broken, a short-term rebound is still possible. In the case of a changed momentum, Ethereum may reclaim recent losses, targeting the mid-week high of $2,881 posted on Wednesday.

XRP, in its turn, trades at around $2.13 representing an intraday decline of almost 5%. Technical indicators are bearishly biased. The Moving Average Convergence Divergence (MACD) indicatively emitted a sell signal on Friday on the daily chart when the MACD line crossed below the signal line. This technical indication might motivate traders to establish short positions, putting selling pressure.

The 200-day EMA at 2.09 continues to act as a critical support area to XRP. A violation may lead to the further development of the bearish trend, which may drag the price below the $2.00 mark and revive the fears of a retest of the April lows at around $1.61.

With macro uncertainties dominating the mood of investors, retail and institutional traders are on high alert, watching price action and technical configurations of key cryptocurrencies.

XRP Slips Amid Geopolitical Turmoil and Legal Developments in Ripple-SEC Case

The fall in price of the XRP accelerated on Friday, closely tracking rising military tensions between Israel and Iran. The token fell to about 2.14, powered by wider market volatility caused by reported Israeli airstrikes against Iranian nuclear sites, missile factories, and military command centers, according to Reuters.

In swift retaliation, Iran launched drone strikes toward Israeli territory, prompting Israel to declare a state of emergency. The conflict has rattled global markets, including crypto, with investors pulling back from risk-on assets.

Amid the heightened geopolitical tensions, Ripple and the U.S. Securities and Exchange Commission (SEC) submitted a joint motion to the U.S. District Court for the Southern District of New York. The motion requests Judge Analisa Torres to lift an injunction in the ongoing legal case and release a $125 million civil penalty currently held in escrow.

Under the terms of the motion, both parties agreed to a proposed resolution where Ripple would pay $50 million to the SEC, with the remaining $75 million returned to the company. The filing stated, “If the Court issues the requested indicative ruling, the SEC and Ripple will move to the U.S. Court of Appeals for the Second Circuit, for a limited remand to seek relief.”

The move follows a previous denial by the Court on May 8, when Judge Torres rejected a similar joint request, noting that Ripple and the SEC had failed to establish whether “exceptional circumstances” justified altering the final judgment, which penalized Ripple for the unregistered sale of XRP to institutional investors.

The blockchain project Ondo Finance announced the deployment of its flagship product Ondo Short-Term U.S. Government Treasuries (OUSG) on the XRP Ledger (XRPL). The product enables institutional investors using XRPL to gain access to tokenized exposure to short-term U.S. Treasury assets, bridging traditional finance and DeFi.

While short-term technical signals remain bearish, a shift in geopolitical conditions and improved market sentiment could support a price rebound. A successful recovery from the $2.14 level could place XRP back on track toward the $2.34 resistance and the seller congestion zone near $2.50 a potential 17% upside from current levels.

Sui (SUI) Drops Over 5% Amid Market Turmoil; Derivatives and Technical Indicators Signal Deeper Decline

On Friday, sui (SUI) continued its decline by more than 5%, following the wider sell-off in the cryptocurrency market that was caused by increasing geopolitical tensions between Israel and Iran. The precipitous decline has registered a row of bearish candlesticks on the daily chart that sounded an alarm of the accumulating downside risks to the token.

The most recent risk aversion trend on the market has driven the Open Interest (OI) in SUI derivatives to the levels last seen in April, indicating a steep decline in the appetite of investors.

SUI Derivatives Indicate Bearish Sounding

SUI Open Interest follows the general market decline, decreasing by 14% over the last 24 hours to $1.20 billion, according to CoinGlass data. The decline in OI indicates that the bullish traders have fled after the sharp fall in prices.

Funding rate volatility also remained, swinging widely before stabilizing at 0.0024%. The positive funding rate shows that the bullish mood is slightly still alive in the short term since long traders are paying to hold positions. This relationship can sustain a short-term recovery.

Liquidation data, however, paints a picture of a hugely bearish environment. Liquidations hit a high of $12.63 million, whereas the shorts were subjected to trivial losses of $766,000. The imbalance pushed the long/short ratio to 0.9369, which indicated more and more the growing influence of bearish traders.

DeFi Activity Contracts along with TVL Slip

The Total Value Locked (TVL) in Sui Network declined by 8.11% over the last 24 hours and dropped to 1.783 billion dollars. The significant decline underlines the declining activity within the DeFi ecosystem on the network as volatility increases.

Liquidity metrics were mixed in spite of the decline in TVL. The stablecoin market cap on the platform increased by 2.73 percent to $1.145 billion in the last 24 hours, and the decentralized exchange (DEX) volume has stayed above $300 million in the last four days. 

Triangle Breakdown Looms as Key Support Tested

On the technical front, SUI is testing a crucial ascending support trendline that connects swing lows from April 8, April 16, and June 5. The recent failure to reclaim the 50% Fibonacci retracement level at $3.54 measured from the $5.36 all-time high to the yearly low of $1.71 has kept the price locked below a key resistance trendline.

The convergence of the rising support and falling resistance trendlines forms a triangle pattern, with SUI now trading just under the 200-day Exponential Moving Average (EMA) near the $3.00 psychological level. A move below the June 5 closing price of $2.92 would confirm a bearish triangle breakdown, potentially targeting the next key support at $2.57 aligned with the 23.6% Fibonacci level.

Technical indicators support the bearish case. The Moving Average Convergence Divergence (MACD) indicator has reversed from its signal line and now prints a red histogram below the zero axis, reinforcing the downward momentum. Meanwhile, the Relative Strength Index (RSI) has dropped to 39, nearing the oversold territory, which could intensify pressure on the current support level.