Bitcoin Drops Below $76,000 After $2,000 Flash Crash

Bitcoin fell below $76,000 Tuesday morning after a rapid $2,000 flash crash that erased recent weekend gains and forced heavy liquidations across the crypto market. The cryptocurrency reached an intraday high of $78,003 around 10:30 a.m. EST before tumbling to an intraday low of $75,740, slipping under the $76,000 support level within roughly three hours.

The move followed weekend rumors of a diplomatic breakthrough that had pushed bitcoin above $77,500. The coin held near $76,500 until about 6:15 a.m. EST, then rallied in two waves back above $77,500 and briefly to $78,003. A swift sell-off then reversed those gains and drove prices to the low.

Liquidations across cryptocurrency markets approached $350 million. About $100 million in leveraged positions were forcibly closed, with roughly $73 million attributed to wiped-out long bets. Bitcoin was about 2% lower over the prior 24 hours and nearly 3% down for the month, putting it on course for a fourth negative month this year.

Market participants linked the volatility to reports of overnight military exchanges between U.S. and Iranian forces in the Strait of Hormuz. U.S. officials downplayed the incident, while the Iranian Foreign Ministry described the operations as a violation of the ceasefire and warned of possible retaliation. High-level diplomatic talks between the two countries were expected to continue for several more days.

The rapid swing from $78,003 to $75,740 took place in a narrow time window, during which forced selling and the closure of leveraged positions amplified price moves and intensified downward pressure on the market.