Ultimatum Triggers $1 Billion Crypto Liquidation
A 48-hour ultimatum issued to Iran on March 22 ignited a sharp sell-off across cryptocurrency markets, leading to over $1 billion in liquidations within 24 hours. The sudden geopolitical escalation caught traders off-guard after eight days of gains, with approximately 85% of the liquidations hitting long positions. Bitcoin plunged from a high of $75,912 on March 21 to $68,241, erasing a full week of gains in just hours. XRP fell 2.6% to $1.37.
The volatility reversed just as quickly. After the threatened military strikes were postponed on March 23, Bitcoin jumped 5% to reclaim the $71,000 level, and XRP recovered to $1.44. The reversal coincided with a dramatic 11% crash in Brent crude oil, which had surged past $112 a barrel on the initial threat. This price action underscores the market's direct sensitivity to geopolitical headlines and their impact on energy markets.
Oil Above $100 Stalls Fed Rate Cuts and Risk Assets
Elevated energy prices are the primary mechanism linking the Middle East conflict to cryptocurrency valuations. With Brent crude consistently pushing above $100, inflation pressures remain high, preventing the Federal Reserve from implementing anticipated interest rate cuts. This macro environment tightens liquidity and reduces investor appetite for risk assets, including Bitcoin and XRP.
Market expert Sam Daodu warned on March 24 that crypto rallies will not be sustainable until Brent crude prices fall toward the $80–$85 range. The data supports this view, with Bitcoin showing an 89% correlation to the S&P 500 during a recent sell-off, behaving like a traditional risk asset rather than a safe haven. Because crypto markets trade 24/7, they often absorb the initial shock of weekend geopolitical developments before other global markets open.
Whale Selling Caps XRP's Price Gains
Even with positive fundamental developments, XRP faces significant internal selling pressure that has capped its price potential. Since peaking at $3.65 in July 2025, an estimated $6 billion in XRP has been cashed out by large holders, or 'whales'. This persistent selling creates a supply overhang, with a notable concentration of sellers around the $1.58-$1.60 price zone.
Furthermore, inflows into XRP exchange-traded funds (ETFs) have slowed dramatically, collapsing from roughly $200 million per week at their launch to under $2 million by early March. This contrasts sharply with Bitcoin ETFs, which attracted $767 million over a similar period. The weak institutional uptake, combined with the fact that Ripple's enterprise clients often prefer its RLUSD stablecoin over the volatile XRP token for settlement, means positive company news does not directly translate into buying pressure for XRP.
