Bitcoin experienced a sharp sell-off on Thursday, falling nearly 5 percent to $62,500 amid renewed tensions in the Middle East and growing concerns over Strategy’s financial structure. With this slide, the world’s largest cryptocurrency was trading almost 50 percent below its peak reached in October 2024.
Regional tensions shake markets
The decline in prices was closely linked to Israel’s renewed military operations in southern Lebanon. Despite a recent accord between Washington and Tehran, which required all military activity—including in Lebanon—to cease immediately and permanently, Israeli Prime Minister Benjamin Netanyahu stated that this deal was not binding for his country.
Following the agreement, Lebanese state media reported a fatal drone strike. Israeli sources later confirmed one soldier was killed and seven others wounded. These developments eroded risk appetite across global markets, increasing selling pressure on crypto assets.
$579 million liquidated in 24 hours
According to CoinGlass data, $579.43 million worth of positions were liquidated in the crypto market over the last 24 hours. Long positions made up $496.62 million of this, impacting more than 139,000 investors forced to close trades.
Analyst Daan Crypto Trades noted that after Bitcoin retested the $60,000 zone two weeks ago, it has tried to hold above the weekly 200 moving average, making him hesitant to expect an immediate drop near such significant support levels on higher timeframes.
Bitcoin led liquidations with $191.49 million, while Ethereum saw $135.46 million in closed positions. Other major cryptocurrencies such as XRP, Solana, and ADA also suffered notable liquidations.
Mini glossary: The weekly 200 moving average is a long-term technical indicator showing the average price over the past 200 weeks. In the market, this level is often monitored as a major area of support or resistance.
Pressure on Strategy’s funding model takes spotlight
Beyond geopolitical factors, fresh doubts over Strategy’s financing mechanisms added further pressure to Bitcoin. The company’s preferred STRC shares, often used to fund its Bitcoin purchases, fell below their face value of $100. The shares briefly touched $83 on Thursday, a move seen as raising the cost of generating new capital for the company.
Joshua Lim, FalconX’s global co-head of markets, observed that market attention has shifted to STRC’s price, which is now a closely watched indicator of pressure on Strategy.
Jeff Dorman, Investment Director at Arca, suggested that Strategy may be forced to sell a significant amount of Bitcoin or common stock to restore stability. QCP Capital also pointed to the company’s buyback of $1.5 billion in 2029 convertible senior notes, noting that lingering questions remained about potential Bitcoin sales to meet dividend obligations.
Strategy’s shares dropped 3.5 percent on Thursday, extending total losses of about 14 percent since Monday’s open and roughly 70 percent over the past twelve months. The company did not respond to requests for comment.
