Tensions in the U.S. and Iran push up risks, and the crypto market rebounds back above $2.4 trillion

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Key Insights

The total market value of cryptocurrencies has rebounded to more than US$2.4 trillion, driven by a new round of demand.

The top 20 cryptocurrencies have risen by more than 12% in the past 24 hours, and prices have finally broken through the consolidation range.

Trump's threat to escalate conflict with Iran could weaken the current recovery momentum.

The cryptocurrency market is going through one of the most exciting weeks in months. Bulls returned strongly, using momentum to pull most mainstream currencies out of weeks of consolidation.

According to CoinMarketCap data, the total market value of cryptocurrencies hovered around US$2.19 trillion on Wednesday. However, during the observation period, the number soared to US$2.42 trillion, rising by 10.7% in the past 24 hours.

This is the largest burst of bull activity in the cryptocurrency market in months. The top 20 cryptocurrencies by market value alone have increased by more than 12% over the same period.

Long activity triggered one of the largest liquidation events in the cryptocurrency market

Today's cryptocurrency market dynamics show that this round of long breakthrough was mainly due to the position layout of whales and institutions in the first half of the week.

Data from Farside Investors showed that Bitcoin ETF received a net inflow of $517.2 million on Wednesday, the highest single-day Bitcoin ETF inflow observed since early May.

The Ethereum ETF also saw strong inflows, reaching US$186.8 million, the highest single-day inflow since October last year.

Although spot ETFs performed significantly, the strong market reaction may also be boosted by forced buying after large-scale liquidations. CoinGlass data shows that this round of long market triggered a medium-term short liquidation of more than US$2.73 billion in the cryptocurrency market, and approximately US$248 million in long liquidation was observed during the same period.

Wednesday's liquidation hit the highest record since October 10 last year. Today, the short clearing amount in the cryptocurrency market reached US$373 million, while the long clearing amount was only US$56.9 million.

Interestingly, this week's large-scale liquidation occurred because the market was already highly uncertain. Most traders expected prices to fall further and therefore opened large short positions. In the end, strong bull momentum cleared out the power of the bears. However, a similar situation may be brewing, risking another large-scale liquidation.

U.S. -Iran escalation risks suggest another long liquidation event

The rebound in the cryptocurrency market after months of consolidation may catalyze the establishment of more long positions. But bulls also face liquidation risks similar to those faced by bears this week-as the Trump administration may be preparing for another escalation of conflict with Iran.

According to the Guardian, U.S. President Donald Trump has announced plans to launch a new round of operations against Iran aimed at economic isolation. Similar measures have previously triggered global turmoil, especially near the Strait of Hormuz. So why is this important for the cryptocurrency market?

The largest liquidation event in cryptocurrency history occurred on October 10, 2025, when more than $19 billion in leveraged positions were liquidated. On that day, President Trump announced economic sanctions. The uncertainty that ensued led investors to pull money out of the market, triggering sharp price falls and mass liquidations. [TAG

This latest announcement does not necessarily cause damage on the same scale as sanctions, but escalation of the conflict could dampen bullish sentiment and could lead to another turn in the market. Such an outcome could trigger another liquidation event, and this time the bulls could be targeted. However, it depends on how markets respond to the news of tensions between the United States and Iran.

Institutional capital flows are the core driver of this rebound. This means that how institutions respond to macroeconomic news will determine how the cryptocurrency market responds. Can the bulls maintain their dominance, or will the bears make a comeback?