Bitcoin (BTC) Price: BTC Slides to $62,000 as War Escalates and Strategy’s Funding Model Cracks

TLDR

• Bitcoin dropped nearly 5% to around $62,500 as Israel escalated strikes in Lebanon
• Crypto liquidations hit $580 million in 24 hours, with over 139,000 traders affected
• Strategy Inc.’s STRC preferred shares fell below par, raising fears the firm may sell Bitcoin
• Rising interest rate expectations are adding pressure on Bitcoin and other risk assets
• Analyst Daan Crypto Trades notes BTC is holding near a key weekly 200MA support level

Bitcoin is facing pressure from two directions at once: a flare-up in Middle East tensions and growing concerns about Strategy Inc.’s ability to keep buying BTC.

The price fell to around $62,500 on Thursday, a drop of nearly 5% in a single day. That puts Bitcoin roughly 50% below its all-time high set in October 2024.

Israel launched new strikes in southern Lebanon, escalating conflict in the region despite a Memorandum of Understanding signed between the United States and Iran. The MoU called for an “immediate and permanent termination of military operations on all fronts, including in Lebanon.” Israeli Prime Minister Benjamin Netanyahu said the deal does not apply to his country.

One person was killed in a drone strike after the agreement was signed, according to Lebanese state media. One Israeli soldier was also killed, with seven others wounded.

The violence rattled financial markets and triggered a wave of forced selling in crypto.

$580 Million in Liquidations

Data from CoinGlass shows $579.43 million in crypto liquidations over 24 hours. Of that, $496.62 million came from long positions. Over 139,000 traders were liquidated.

Bitcoin led all assets with $191.49 million in liquidated positions. Ethereum followed at $135.46 million. XRP, Solana, and ADA also saw liquidations.

Analyst Daan Crypto Trades weighed in on the situation, noting on X that BTC is “still fighting around its Weekly 200MA after the $60K sweep 2 weeks ago.” He said that despite the broader downtrend, he does not like “getting bearish right at high timeframe supports,” pointing out that even small bounces have produced rallies in altcoins.

Strategy Inc. Under Pressure

Away from the geopolitical news, Strategy Inc. is adding its own pressure on Bitcoin’s price.

The company’s STRC preferred shares — used to fund Bitcoin purchases — have fallen below their $100 par value. They briefly dropped to $83 on Thursday. When shares trade below par, Strategy raises capital at a loss.

Jeff Dorman, CIO at Arca, said Strategy should sell a large amount of Bitcoin or common stock to stabilize the situation, or risk watching “every part of your cap structure melt.”

Strategy shares fell 3.5% on Thursday and are down about 14% since Monday. The stock has dropped 70% over the past year.

The firm bought back $1.5 billion of its 2029 Convertible Senior Notes, which QCP Capital noted increases concern about whether Strategy may need to sell Bitcoin to cover dividend payments.

Strategy did not respond to a request for comment.

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