$1.8 Billion in Just One Hour: How War Reports Sparked a Historic Leverage Purge in Crypto

Summary:
Following reports of "Operation Epic Fury," a U.S.-Israeli strike over Tehran on February 28, the crypto market experienced a rapid downturn, with nearly $1.8 billion in trades occurring within an hour. Despite initial panic leading to a clearance of many leveraged positions, the market displayed resilience, with Bitcoin and other cryptocurrencies quickly recovering.

Key Takeaways

The crypto market faced a significant reaction to geopolitical tensions, with a rapid $1.8 billion in sales within an hour.
The Bitcoin Derivatives Pressure Index fell dramatically, indicating a loss of bullish confidence.
Despite an initial drop, the crypto market showed surprisingly strong recovery shortly after the panic.
Many users highlighted the strength of Bitcoin and altcoins, suggesting ongoing investor confidence despite global uncertainties.

Bitcoin Derivatives Market Pressure Index
Source: CryptoQuant

US-Israel strike and its impact on crypto

Instant Market Reaction

The announcement of "Operation Epic Fury" triggered an immediate alarm in the crypto space. In just 60 minutes, traders began selling aggressively, causing the market to plunge rapidly. According to CryptoQuant, this surge in sales generated an astonishing $1.8 billion in trading volume, marking a significant moment for all crypto investors. The Bitcoin Derivatives Pressure Index saw a steep decline from 30% to just 18%, reflecting a swift collapse in bullish sentiment.

While prices indeed dropped, it also cleared a substantial amount of risk from the market. Despite escalating geopolitical tensions, the crypto sector has proven to be surprisingly resilient, suggesting that the worst of the panic might already be behind us.

Crypto Market Shows Resilience

As of the latest updates, the Crypto Fear and Greed Index indicated an "Extreme Fear" level at 14, an improvement from a staggering low of 5 on February 23, which marked one of the most severe declines in market confidence in recent history.

The situation is changing; while investors remain cautious, the sheer panic of the previous week appears to be subsiding. As a result, the total cryptocurrency market capitalization climbed to $2.32 trillion, showcasing a 3.39% increase within just one day. Bitcoin rose above $67,114, showing a 4.34% uptick, and Ethereum (ETH) rallied even higher, increasing by 6.86% and trading above the $2,000 mark again.

Community Confidence in Bitcoin and Altcoins

Commenting on Bitcoin’s resilience, one user on X aptly noted, “Iran just showed the world why Bitcoin is the hardest money.” They elaborated that while Bitcoin cannot resolve conflict, it removes the ability to trap people in faltering currencies and limited banking systems.

There’s buzz around an emerging altcoin season as well. Another user expressed optimism that people are beginning to recognize the potential of altcoins: “Alts just had their first two months of green MACD and bullish crossover in four years. It’ll all seem obvious when it’s too late…”

Alts did NOT go to Zero
Source: X

Echoing a similar optimistic outlook, another user remarked that altcoin dominance is nearing a breakout from a wedge formation that has been consolidating for several years. Although the market doesn’t appear strong yet, the outlook remains promising.

However, according to CoinMarketCap data, we are still technically in the Bitcoin season.

Historical Responses to Military Tensions

Historically, military conflicts involving Iran have induced short-lived panic within the Bitcoin market, but any drops typically do not persist. For example, in April 2024, Bitcoin (BTC) fell 8% overnight yet rebounded within two days. In October 2024, a 3% dip was followed by swift recovery, and in June 2025, a 6% drop preceded a substantial 62% surge to new highs.

In contrast, February 2026 presented a unique scenario. Bitcoin was already vulnerable, having declined 48% from its all-time high, with the Weekly RSI hitting a historic low, indicating that the market was severely oversold. The Fear & Greed Index lingered in fear territory for three consecutive weeks, highlighting that extreme anxiety had taken hold of the market.

Crucially, traders had decreased Open Interest by 55%, and the market had shed leverage over the previous five months, resulting in a cleaned-up landscape of over-leveraged positions. Therefore, when the news of the strike broke, there weren’t many weak hands left to shake out.

Looking Forward

While both gold and silver remained slightly up and the S&P 500 faltered, Bitcoin’s performance exceeded expectations. This suggests that the overwhelming selling pressure may have already subsided. Rather than breaking the market, the shock event might actually confirm the bottom.

This event aligns with reports of Iran’s digital currency activities reaching approximately $7.78 billion in 2025, indicating that individuals tend to move cryptocurrency into personal wallets during times of instability and currency deficiencies. As global tensions rise, the crypto market now awaits its next moves.

Final Summary

The geopolitical landscape continues to evolve, but the cryptocurrency market has shown resilience amidst panic, with active discussions about the implications for Bitcoin and altcoins. What remains to be seen is how these tensions will affect the market moving forward.