Crypto Market Declines Amid U.S. Airstrikes and $897 Million in Long Liquidations
The cryptocurrency market experiences a decline as U.S. airstrikes in the Strait of Hormuz prompt inflation concerns, leading to nearly $900 million in liquidations of leveraged long positions. Bitcoin drops near $73,400, while Ether falls below $2,000 for the first time since March, according to CoinDesk.
On May 28, 2026, the cryptocurrency market faced sharp declines as U.S. airstrikes in the Strait of Hormuz raised inflation concerns, contributing to a sell-off that resulted in approximately $958 million of crypto positions being liquidated within 24 hours. The majority of these liquidations were long positions, totaling around $897 million.
Bitcoin (BTC) fell to its lowest point since April 13, trading near $73,314.75, while Ether (ETH) slipped below $2,000 for the first time since March 29, marking a decline of 1.5%. The immediate trigger for this downturn was a spike in crude oil prices, which rose to $96 a barrel, exacerbating existing inflation fears across various asset classes.
The overall market sentiment shifted towards risk-off, with significant pressure also seen in U.S. equity futures, including the S&P 500 and Nasdaq 100 derivatives. This reflects a broader anxiety regarding potential economic instability due to geopolitical tensions.
Despite the downturn, Ether's open interest reached a record high of 16.39 million ETH (approximately $32.61 billion). This increase relatively corresponds with the falling price, suggesting that traders are positioning themselves for further declines rather than attempting to buy at reduced prices. A majority of the total liquidations, which amounted to $958.8 million, largely comprised long positions, underscoring the downward market pressure.
As traders reacted to these market shifts, perpetual funding rates for cryptocurrencies like XRP and Solana turned negative, indicating a preference for short positions among market players. Additionally, about $8 billion in options on the Deribit exchange is set to expire shortly, raising concerns about potential volatility in the upcoming trading sessions.
Looking ahead, the Diribit platform's volatility index indicates a drop in overall market volatility relative to the past year. However, traders are paying more for downside protection, as evidenced by elevated put-call skews for Bitcoin. Open questions remain about how ongoing geopolitical events will continue to impact risk sentiment in crypto markets, and whether Bitcoin can maintain stability above current price levels.
Summary based on original reporting by Oliver Knight at CoinDesk, originally published May 28, 2026. SolanaWire does not republish source content.
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