Trump's Tough Stance on Iran Triggers Risk Asset Sell-Off, Bitcoin Falls Below $77,000

May 18: Crypto markets and global risk assets took a collective hit Wednesday after U.S. President Donald Trump’s hardline rhetoric toward Iran spooked investors. Trump warned Iran that its "time is running out" and it must act quickly or face consequences, pushing Brent crude briefly above $112 per barrel. Bitcoin dipped roughly 2.4% to $76,500, hitting its lowest point since April 30, while Ethereum dropped 3.5% to $2,116—nearly wiping out all of its gains from April. U.S. stock futures also faced headwinds, with S&P 500 futures falling 0.3% and Nasdaq 100 futures sliding 0.25%. Derivatives market data underscores the shift: total nominal trading volume across the entire market jumped 65% to $159 billion in the past 24 hours. But open interest (OI) fell 1.48% to $125 billion, and liquidations skyrocketed 500% to $677 million. That points to massive deleveraging underway, not fresh directional bets on the market’s next move. Altcoins fared far worse than major cryptocurrencies: Bitcoin Cash (BCH) tumbled 10%, Dogecoin (DOGE) dropped 4.5%, and the CoinDesk Meme Index fell 2.2%—one of the hardest-hit segments. Notably, BCH shows clear signs of a "crowded short" position: its OI rose 13% to 1.47 million coins, and its perpetual contract annualized funding rate plummeted to -72%—the most negative of any major crypto. That aggressive bearish sentiment could trigger a sharp short squeeze if market mood reverses suddenly. On the upside, Zcash (ZEC) held relatively steady: its OI has climbed for three consecutive days, topping 2 million coins. It also ranks among the top major cryptos for 24-hour active buyers, with a funding rate of about 4%—not yet in overheated territory. ZEC is up 111% this quarter, and markets believe it still has room to rise if the overall environment stabilizes. Tokens like HYPE, Cronos (CRO), and Toncoin (TON) saw rising OI contracts. But outside of ZEC, TON, and HYPE, most tokens in the top 25 by market cap have negative Crypto Volatility Index (CVI) imbalances, meaning selling pressure remains the dominant force in the market. Turning to volatility: Bitcoin’s 30-day implied volatility index (BVIV) has climbed from 40% to 42% since May 9. The U.S. Treasury Bond Volatility Index (MOVE) jumped 14% last Friday—its largest one-day gain since March 26. Markets are concerned that mounting global financial stress could further escalate panic in crypto markets.