Why is the crypto market going down today? (May. 28)

The crypto market remained under pressure on Thursday as renewed military tensions between the United States and Iran triggered another sharp wave of liquidations and ETF outflows.

Summary

• Bitcoin fell under the $73,000 mark as U.S.-Iran tensions, rising oil prices, and liquidations pressured crypto markets.
• U.S. spot Bitcoin ETFs recorded $733 million in outflows on Wednesday, extending their losing streak to eight straight days.
• More than $900 million in leveraged crypto positions were liquidated after Bitcoin and Ethereum broke key support levels.

According to data from CoinGecko, the total cryptocurrency market capitalization fell roughly 4% over the past 24 hours to around $2.48 trillion, while Bitcoin (BTC) dropped from the $76,000 region to hit a five-week low below $73,000 before recovering slightly at press time.

Ethereum (ETH) fell more than 5% below the $2,000 mark, while major altcoins, including Solana (SOL), XRP (XRP), BNB (BNB), Dogecoin (DOGE), and Hyperliquid (HYPE), recorded losses ranging between 6% and 14% as traders continued reducing exposure to risk assets amid rising macro uncertainty.

According to CoinGlass data, over $900 million worth of crypto positions were liquidated across the derivatives market over the past 24 hours, with bullish long positions accounting for most of the wipeout.

The latest decline accelerated after Bitcoin lost support near $75,000 while Ethereum broke below the $2,100 area, triggering another cascade of forced liquidations across leveraged trading platforms.

As exchanges automatically closed underwater bullish positions, the additional forced selling added more pressure to spot prices and intensified downside momentum across the broader market.

Oil prices jump as U.S.-Iran tensions escalate

Investor sentiment also deteriorated after military tensions between Washington and Tehran intensified again this week.

WTI crude futures climbed 2.6% to trade above $91 per barrel on Thursday, while Brent crude rose toward the $96 region after reports emerged that U.S. forces struck Iranian military targets believed to threaten commercial shipping routes near the Strait of Hormuz.

At the same time, Iran’s Revolutionary Guard reportedly targeted a U.S. airbase, though officials did not disclose the location.

Negotiations between both countries also remained deadlocked, with Iran reportedly insisting on retaining control over the Strait of Hormuz and preserving its nuclear program as part of any potential agreement.

The latest escalation weakened expectations for a short-term peace deal that could reopen the key shipping corridor and normalize global oil flows.

Rising energy prices added to fears that inflation could remain elevated for longer, potentially reducing the likelihood of near-term Federal Reserve interest-rate cuts and tightening liquidity conditions for speculative assets such as cryptocurrencies.

ETF outflows extend as institutions reduce exposure

Institutional demand also weakened considerably over the past two weeks.

U.S. spot Bitcoin ETFs recorded roughly $733 million in net outflows on Wednesday, the largest single-day withdrawal since February this year. The latest exits additionally extended the products’ losing streak to eight consecutive trading sessions.

Meanwhile, spot Ethereum ETFs extended their own outflow streak to 12 straight days after another $67 million exited the funds on Wednesday.

Cumulative withdrawals from U.S. spot Bitcoin ETFs have now reportedly reached $2.33 billion over the past two weeks as institutional investors continued rotating capital away from crypto products during the recent volatility.

In a report shared with crypto.news, Bitfinex analysts highlighted that Bitcoin’s market structure weakened after a recent $766 million liquidation event, rather than undergoing a full leverage reset typically seen after large derivative flushes.

The analysts noted that futures open interest dropped sharply after Bitcoin corrected more than 10% from highs above $82,000. However, leveraged positioning reportedly returned unusually quickly afterward, largely driven by retail traders reopening bullish positions on crypto-native exchanges.

Analysts added that institutional venues such as CME have not shown similar leverage activity, while the Coinbase Premium Gap remained negative despite elevated funding rates.

The report also noted that options traders continued paying premiums for downside protection ahead of Thursday’s U.S. Personal Consumption Expenditures report, the Federal Reserve’s preferred inflation gauge.

“A hot print for PCE on Thursday, 28 May would increase stress on the leverage-long book by shifting the rate path outlook, whereas an in-line print would remove the macro catalyst, forcing the range to resolve purely on positioning dynamics,” Bitfinex analysts said.