Israel's heavy blow to Ethereum: Is the geopolitical crisis contributing to fluctuation profit opportunities in the crypto market?

Written by: Ding Dang, Odaily

This morning, a sudden "black swan" shattered the brief tranquility of the financial markets.

As news of Israel launching airstrikes against Iran emerged, the cryptocurrency market faced a severe setback. According to the OKX market data, the price of BTC dropped below $103,000, with a 24-hour decline of 3.3%; ETH, which had recently seen a rise, fell below $2,450, with a decline of 9.2%; and the price of SOL, which had benefitted from ETF news, reached around $140, with a decline of 9.5%.

The derivatives market is in dire straits. According to Coinglass data, in the past 24 hours, the total liquidation across the network reached 1.159 billion USD, with the vast majority being long positions, amounting to 1.084 billion USD. In terms of currency distribution, BTC accounted for 458 million USD in liquidations, while ETH accounted for 287 million USD.

The market switched from a rebound to a collapse, all in one night.

The escalation of the situation in Iran: the trigger for the decline

This decline is not driven by technical factors, but rather by typical geopolitical sudden events.

Israel launched airstrikes against Iran, and the commander of Iran's paramilitary Revolutionary Guard, Salami, is reportedly likely to have been killed in the attack. According to Jin Ten reports, several senior Iranian officials have also become targets of Israeli strikes, including the Chief of Staff of the Armed Forces, Mohammad Bagheri. Israeli Defense Minister Katz stated that missile and drone attacks against Israel and its civilians are expected in the near future. Currently, Israel has conducted five rounds of airstrikes against Iran.

The official media in Iran also conveyed a statement from the Chief of Staff of the Iranian Armed Forces, stating that Israel and the United States will "pay a very heavy price." In response, the U.S. and Israel will face "severe strikes." According to reports from Saudi media citing Israeli media, the Israeli city of Tel Aviv was attacked, including 10 nuclear facilities.

According to informed sources, Trump and his senior foreign policy advisors discussed how to reach an Iran nuclear agreement without escalating the situation at Camp David last Sunday and Monday. The Iran issue is one of several foreign policy topics and meetings held during the evacuation of U.S. personnel. Government officials appear determined to reach an agreement through diplomatic means before any Israeli airstrikes.

U.S. Special Envoy for the Middle East, Wittekov, originally planned to travel to Oman for the sixth round of negotiations, but the airstrike has cast a shadow over the prospects for talks. Trump stated on Truth Social: "We remain committed to resolving the Iranian nuclear issue through diplomatic means! My entire administration has been directed to negotiate with Iran. They could be a great country, but they must first completely abandon their hopes of acquiring nuclear weapons."

U.S. Senator Chris Murphy stated that the attack on Iran "is clearly intended to sabotage negotiations between the Trump administration and Iran," and "risks a regional war that could have catastrophic consequences for the United States."

The geopolitical storm has not only heightened tensions in the Middle East but also severely impacted the global risk asset market. U.S. stock index futures have widened their declines, with Nasdaq futures down by 2%. The recent rebound in the crypto market has been reversed, while safe-haven assets are rising. The spot gold price has today surpassed 3400 dollars / ounce, soaring by 55 dollars, with a daily increase of over 1.65%. Gold-related assets have also collectively risen.

Data Observation: Is There a Bottom-Fishing Opportunity for ETH?

Despite the turmoil in the cryptocurrency market, ETH has quietly become the focus of capital inflow against the trend. On-chain data reveals that institutions and whales are "increasing their positions to support the market."

According to on-chain analyst Yu Jin's monitoring, a whale that has accurately profited from ETH in two separate phases has spent a total of $174.1 million today after the drop to purchase 65,325 ETH at an average price of $2,665. It is currently in a floating loss.

Lookonchain data shows that an address possibly associated with ConsenSys bought 2,825 ETH via OTC 4 hours ago, amounting to 7.48 million dollars; in the past two weeks, this address has accumulated over 160,000 ETH (valued at 421 million dollars).

Moreover, whales are choosing leveraged operations. According to monitoring by The Data Nerd, an address starting with 0x109 borrowed 5 million USDT from Aave and bought 1,844 ETH (approximately 4.6 million USD). After that, the address deposited all these ETH into Aave, and currently, there are a total of 23,786 AETHWETH in his wallet.

These actions do not seem to be a spur-of-the-moment "betting on a rebound." Rather, they are a clear signal of resonance between on-chain data and the real market: ETH is being re-embraced by large funds.

Why ETH? Why now?

Behind ETH's contrarian accumulation, the market is not without clues.

Since the beginning of 2025, the Ethereum Foundation has initiated rare reforms to enhance operational efficiency through "self-reduction" and team restructuring. This move is interpreted by the market as a signal that the Ethereum ecosystem is moving towards a more mature and sustainable development.

Following MicroStrategy's inclusion of BTC on its balance sheet, ETH has also begun to gain popularity as a new favorite in corporate financial reserves. The publicly traded company SharpLink Gaming recently announced that it would include ETH in its asset allocation. Additionally, according to Bloomberg, at least three Nasdaq-listed companies are assessing the inclusion of ETH as a long-term investment asset, attempting to replicate MicroStrategy's "growth flywheel" model. This trend indicates a deepening recognition of ETH by traditional finance.

According to data from Deribit, the trading volume of ETH call options has been continuously rising since June, indicating an increasing market expectation for a short-term rebound in ETH.

Image source: @Amberdataio

Who is gathering the "ETH army"?

On June 11, a wallet suspected to be associated with Cumberland withdrew 10,200 ETH (approximately 28.54 million USD) from Binance. The address had deposited 30 million USDC to Binance 20 hours earlier for positioning, when the price of ETH was in the 2790 USD range.

The largest bullish sentiment for ETH in this round (especially in the Chinese-speaking community) belongs to Trend Research. This organization has been continuously bullish on ETH since it was at 1400 USD, currently holding 142,000 ETH. Founder Jack Yi openly holds 100,000 ETH options long positions.

More dramatically, ETH became the "investment target" of hackers: in April 2023, they stole various tokens worth 23 million dollars from the Bitrue exchange, then exchanged these assets for ETH, but sold 4,207 ETH at a price of 3,885 dollars for 16.345 million DAI.

On June 12, hackers transferred 5111.5 ETH and 16.345 million DAI to a new address, then used the 16.345 million DAI to purchase 5,917.8 ETH at a price of $2,762. They then washed all 11,029.3 ETH (30.46 million dollars) through Tornado.

In other words, the $23 million in assets stolen by hackers from Bitrue was ultimately converted into 12,079 ETH and transferred through Tornado, at which point the value increased to $32.36 million, a growth of $9.36 million from the initial value.

Market focus: Where will BTC stop falling? Can ETH break the deadlock?

Caroline Morin, co-founder of the crypto derivatives liquidity provider Orbit Markets, analyzed: "The cryptocurrency's negative reaction to the news of Israel attacking Iran is consistent with the performance of major risk assets. We expect BTC to find technical support around $101,000, but in the short term, geopolitical news will remain the dominant factor influencing price movements."

The situation in the Middle East remains highly uncertain, and it is difficult for risk assets to show signs of recovery in the short term. However, the contrarian accumulation of ETH undoubtedly sends a signal: the market is still looking for certain assets, and ETH may be emerging from the "altcoin resonance."

In contrast, the situation for altcoins is not optimistic. Rui, an investment manager at HashKey Capital, stated that the liquidity of altcoins has reached a freezing point. There are no buy or sell orders on the order book, good news goes unheeded, new coins drop within thirty seconds of listing, and everything has turned into a downward spiral.

However, there is also good news. Recently, the Chairman of the U.S. Securities and Exchange Commission, Paul Atkins, stated that the SEC is developing an "innovation exemption" policy for DeFi platforms. Atkins mentioned that he has requested staff to study modifications to the rules to provide regulatory exemptions for on-chain financial systems, allowing entities under SEC jurisdiction to quickly launch on-chain products. If this policy is implemented, it would mean a relaxation of regulation on DeFi, which will directly benefit the expansion of the Ethereum ecosystem and enhance the intrinsic value of ETH.

However, this also raises a key question: Does the rise of ETH signify the return of the "altcoin season"? The answer may not be optimistic. Currently, ETH's ability to attract investment relies more on the substantial backing from institutions. So, if even ETH needs institutional support, what can the other altcoins rely on?