Why is the crypto market down today? Middle East conflict escalates; Bitcoin drops below $70,000; liquidations across the entire network total $300 million

Gate News message: As of March 27, the crypto market continued its downward trend. Bitcoin fell below the $70,000 level, reaching a low of about $68,560, with an intraday decline of nearly 3%. Ethereum pulled back to around $2,050, while major assets such as Dogecoin and Solana generally dropped 2% to 4%. The total market capitalization fell to about $2.43 trillion. Over the past 24 hours, the liquidation amount was close to $300 million. Long liquidations accounted for more than 80%, indicating that bearish forces are in control.

The core driver of this pullback is the escalation of geopolitical risk. The failure of U.S.–Iran diplomatic negotiations, combined with heightened tensions in the Middle East, has disrupted shipping through the Strait of Hormuz, putting global energy supply under pressure. Crude oil prices have continued to rise; both WTI and Brent crude have increased by more than 30% over the past month. The market has started to reprice inflation risk. If energy prices remain elevated, the Federal Reserve’s monetary policy path may turn more restrictive, suppressing risk-asset valuations.

Changes in macro expectations directly hit crypto assets. Although the Federal Reserve previously kept interest rates unchanged, stronger expectations for a rebound in inflation have raised doubts about the pace of future rate cuts. Meanwhile, although the Trump administration signaled an extension of the pause period for military operations, it failed to effectively ease market anxiety.

Fund flows have also shifted noticeably. Some capital has rotated into traditional safe-haven assets such as gold. Gold prices have returned to elevated levels, weakening the appeal of the crypto market. In addition, global technology stocks have faced simultaneous pressure. Equity markets in Japan, South Korea, and Hong Kong, China, have all seen pullbacks. Valuations of U.S. tech giants have also been revised downward, further dragging down risk appetite in crypto.

On-chain and sentiment indicators are also weak. The Fear and Greed Index has fallen to 28, entering the “fear zone,” suggesting that investors’ risk-averse sentiment has intensified. Mining companies and crypto-related stocks have declined in tandem. Rising energy costs and a drop in coin prices have squeezed profit margins.

In the short term, whether Bitcoin can regain and hold the $70,000 level will depend on the recovery of the macro environment and risk appetite. Until there are signs of easing in oil prices, rate expectations, and geopolitical conditions, the crypto market may continue to experience a high-volatility regime.