Bitcoin Price Analysis: BTC Plunges After Major Escalation In Middle East Tensions

Bitcoin (BTC) extended its losses for a third consecutive day, plunging to a low of $102,832 as markets turned bearish thanks to escalating tensions in the Middle East. Tensions flared up after Israel conducted preemptive strikes on Iranian military facilities, worsening market sentiment. 

Traders hopeful of a move past $111,000 were stunned as geopolitical realities meant bullish sentiment around BTC evaporated. The flagship cryptocurrency has rebounded to reclaim $105,000 but remains trading in the red. 

Bitcoin (BTC) Traders Prepare For Volatility 

Bitcoin (BTC) traders and holders are bracing for increased volatility after on-chain data revealed a steady decline in exchange and OTC balances, indicating a tightening supply as traders begin accumulating the asset. Retail investor activity is also subdued, making it an unusual backdrop for an asset pushing towards all-time highs. As demand grows, centralized exchanges have reported substantial declines in their Bitcoin balance. Balances have plunged over 14% since the beginning of 2025 to 2.5 million BTC, a level last seen in August 2022. A declining supply of Bitcoin on centralized exchanges typically indicates growing investor confidence as they move their assets into cold storage. However, this also reduces the liquid supply of the asset, leading to a spike in prices. 

Over-the-counter (OTC) Bitcoin numbers are also showing a drop in supply. While OTC desks operate by matching buyers and sellers, they rely on BTC reserves to facilitate quick and credible transactions. However, these reserves are also at historic lows, with CryptoQuant data revealing OTC addresses associated with miners have reported a 19% drop in Bitcoin balances since January. With exchange and OTC reserves drying up, the supply is shrinking rapidly. This could amplify price movements as demand for an increasingly scarce asset rises. 

Liquidations Rattle Crypto 

Bitcoin (BTC) slumped below $106,000 on Thursday as bearish sentiment intensified. The decline continued on Friday, falling to an intraday low of $102,832 before rebounding. Bitcoin’s sudden decline sent alarm bells ringing across crypto, with the mood gloomy as sellers hold a distinct advantage. The drop dragged the crypto market down as well, with its market cap plummeting to $3.24 trillion. A total of $645 million in long and short positions were wiped out in the past 24 hours, with $297 million tied to Bitcoin longs alone. Data from Coinglass highlighted a massive $201 million liquidation on a BTC/USDT trade. 

GameStop’s Bitcoin Bid Sends Shares Into Freefall 

GameStop’s plan to add more Bitcoin to its balance sheet by boosting its private convertible note offering to $2.25 billion sent its share tanking 22%. The move by the video game and consumer electronics retailer indicates a firm commitment to building its corporate Bitcoin treasury. The sale of the boosted convertible note offering is expected to conclude on Tuesday. GameStop expects to raise $2.23 billion from the offering or $2.68 billion if the purchasers exercise their right to purchase additional notes in full. The boosted offering is a $500 million increase from the initial $1.75 billion announced on Wednesday. 

The funding round comes after the retailer announced the purchase of 4,710 BTC, valued at around $513 million. The purchase came two months after the company announced plans to build a Bitcoin treasury. GameStop plans to use the funds raised from the offering for general corporate purposes, including investments consistent with GameStop’s investment policy, hinting at more Bitcoin purchases in the future. The video game retailer is currently the 11th largest corporate holder of Bitcoin. 

However, the company's shareholders are unhappy with the pivot towards Bitcoin, with the share price plunging 22% following the announcement. The firm's share price has struggled to maintain its upside momentum since it announced mixed earnings for the first quarter of 2025. GameStop reported a revenue of $732.4 million, slightly lower than the expected $754.2 million. 

Czech Government Faces No-confidence Vote After Bitcoin Scandal 

The Czech Republic's main opposition party has called for a No-confidence Vote against the ruling party, accusing it of corruption over a $45 million Bitcoin payment from a convicted criminal. Alena Schillerova, Vice Chair of the right-wing ANO Party, stated on X that her party felt there was no choice but to submit the no-confidence motion scheduled for Tuesday. The country's Justice Ministry announced on May 28 that it had sold almost 500 Bitcoin for 1 billion Czech koruna ($45 million) in an auction after receiving it from Tomas Jirikovsky. Jirikovsky ran an online black market and was convicted of embezzlement, drug trafficking, and weapons violations in 2017. 

The opposition has demanded a probe into the auction and the ministry's conduct. It has also asked for information about who sanctioned the transaction. They also alleged that the winners of the Bitcoin auction were demanding their funds back and wanted to know how they would be compensated. The Czech Justice Minister Pavel Blazek was forced to resign because of the scandal. However, he denied any wrongdoing, adding that he resigned to protect the government's reputation in an election year. 

Bitcoin (BTC) Price Analysis 

Bitcoin (BTC) extended its losses for a third consecutive day as escalating tensions in the Middle East plunged the markets into chaos.  The flagship cryptocurrency surged past $110,000 at the beginning of the week, fueling speculations of a move past $111,000 and a new all-time high. However, global tensions flared after Israel launched preemptive strikes on Iran, targeting its military and nuclear facilities. As a result, BTC plunged below $105,000, falling to a low of $102,832. BTC’s sudden decline sent shockwaves through the market, dragging the broader crypto ecosystem down. As a result, the crypto market cap fell over 4% to $3.24 trillion. 10x Research discussed Bitcoin’s price action in a post on X, stating, 

“Bitcoin Just Lost Its Breakout — Here’s the Support Level That Matters Now. Bitcoin’s breakout above $106,000 didn’t hold, and that could mean more than just a failed rally. Bitcoin needed to hold above the $106,000 breakout level. Falling back below this threshold invalidates the Monday breakout signal and reinforces our cautious stance.”

The decline caught an optimistic market, buoyed by recent positive price action, completely off guard. As a result, over $427 million in long positions were liquidated in the past 24 hours, according to data from CoinGlass. BTC was trading around $109,000-$110,000 a day prior, fueling speculations about a move to a new all-time high. While BTC has dropped substantially, gold and oil prices have surged. However, analysts believe this trend could reverse soon if historical trends are anything to go by. Bitcoin entrepreneur Anthony Pompliano highlighted the same in a post on X, stating that 

“Oil up. Gold up. Bitcoin down. The initial reaction follows exactly what happened when Iran shot 300 missiles at Israel. Bitcoin ended up outperforming the other two over the first 48 hours in that situation. Will be interesting to see what happens here.”

BTC faced selling pressure and volatility on Monday (June 2), falling to an intraday low of $103,768 before recovering to reclaim $105,000 and settle at $105,902. The price fell back into the red on Tuesday, falling 0.44% to $015,436. Sellers retained control on Wednesday as BTC fell almost 1%, slipping below $105,000 and settling at $104,752. Bearish sentiment intensified on Thursday as BTC plunged 3%, falling to a low of $100,424 before settling at $101,614. It recovered on Friday, rising nearly 3% and settling at $104,378.

Source: TradingView

Buyers retained control over the weekend as BTC rose 1.15% on Saturday and registered a marginal increase on Sunday to reclaim $105,000 and settle at $105,784. Bullish sentiment intensified on Monday as BTC surged over 4%, crossing the 20-day SMA and $110,000 and settling at $110,251. Bulls lost momentum after reaching this level, and the price fell to an intraday low of $108,335 on Tuesday. However, it recovered to reclaim $110,000 and settle at $110,253. Bearish sentiment returned on Wednesday as BTC fell 1.42% to $108,687. Selling pressure intensified on Thursday as BTC plunged nearly 3%, slipping below the 20-day SMA and settling at 105,828. The price fell to a low of $102,832 during the ongoing session as markets turned bearish but has made a marginal recovery to move to $104,816.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.