Bitcoin Drops Below $73K as Strait of Hormuz Tensions Trigger Crypto Market Sell-Off

Bitcoin (BTC) fell to its lowest level since April 13 on Thursday after renewed geopolitical tensions in the Strait of Hormuz sparked a broad sell-off across global risk assets. The leading cryptocurrency briefly dropped to around $72,874 before recovering slightly to trade near $73,400, marking a 1.2% daily decline. Ether (ETH) also weakened, slipping below the critical $2,000 level for the first time since late March.

The market downturn followed reports of U.S. airstrikes in the Strait of Hormuz, which crushed hopes for a ceasefire and triggered a sharp rise in oil prices. Crude oil surged from $92 to nearly $96 per barrel before easing slightly during the European trading session. The sudden spike fueled concerns about inflation and economic uncertainty, putting pressure on both cryptocurrency and traditional financial markets.

U.S. stock futures also turned negative, with S&P 500 and Nasdaq 100 futures posting losses ahead of the American market open. The broader risk-off sentiment spilled heavily into digital assets, leading to nearly $959 million in crypto liquidations over the past 24 hours. Long traders accounted for the majority of the losses, with over $897 million wiped out.

Bitcoin futures open interest remained relatively stable overall, although CME futures activity declined significantly, signaling reduced participation from institutional investors. Meanwhile, Ether open interest reached a record high despite falling prices, suggesting traders are increasingly opening short positions in anticipation of further downside.

Altcoins also suffered steep losses amid weak liquidity conditions. AI-focused cryptocurrencies such as RENDER and FET dropped sharply, while DeFi-related tokens including JUP and ETHFI also recorded notable declines. CoinMarketCap’s Altcoin Season Index fell to 30/100, its lowest reading in more than 90 days, highlighting the market’s growing defensive stance.

Adding to market uncertainty, traders are closely watching Friday’s major Deribit options expiry, involving approximately $8 billion in Bitcoin and Ether contracts. Despite relatively low implied volatility levels, options data shows traders continue to pay premium prices for downside protection, reflecting persistent caution across the crypto market.