Bitcoin Price Tumbles on Geopolitical Risk, Huge Unwind Leverage
Bitcoin (BTC) price declined 3% to $73,308.33 on Thursday as renewed geopolitical tensions stoked sell-offs and a massive unwind of leverage.
The BTC price decline was driven by a macro shock that exposed weak institutional demand and overleveraged markets. The digital asset underperformed a falling market. It shows a strong correlation (84%) with Gold, indicating a shared macro-driven move.
The primary catalyst was renewed U.S. military strikes on Iran near the Strait of Hormuz on May 27-28, which reversed ceasefire hopes and triggered a global risk-off reaction.
This caused Bitcoin, viewed as a risk asset, to drop sharply alongside rising oil prices. The move underscores Bitcoin’s current sensitivity to macro headlines and its high correlation with traditional risk assets during periods of uncertainty.
Also, spot Bitcoin ETFs recorded significant net outflows, with a reported $733 million exiting on May 27 alone, part of an eight-day streak.
This institutional selling pressure coincided with over $363 million in Bitcoin long positions being liquidated over 24h, further pressuring prices.
Crypto analysts said weak institutional demand and excessive leverage created a fragile setup that amplified the downside move once selling began. Technically, Bitcoin is oversold based on Relative Strength Index signals and is testing the recent swing low at $72,650.
The 50% Fibonacci retracement level at $74,332 now acts as immediate resistance. The key trigger is whether ETF outflows persist. If BTC holds $72,650, a bounce to test $74,332 is likely.
A break below support opens a path toward the psychological $70,000 level. The immediate trend is bearish, but oversold conditions suggest a near-term consolidation or relief bounce is possible.
