On June 21 local time, Trump directly attacked three Iranian nuclear facilities. He poured bunker busters and Tomahawk missiles into Fordow, Natanz, and Isfahan, declaring, "Iran's nuclear capabilities have now completely disappeared."
As soon as this news broke, the digital asset market immediately fell into chaos. A total of $710 million was liquidated, and 173,000 traders were instantly kicked out of the market. Ethereum plummeted by 7.4%, dropping to $2,260, with over 70% probability of falling below $2,000 by year-end.
Unlike traditional markets that were closed for the weekend, only the 24-hour digital asset market fully absorbed this shock. While it's uncertain how other markets will react when Monday trading opens, digital assets have been hit on the front lines. The market quickly reacts to bad news but remains lukewarm to good news. This is the current reality of the digital asset market. Even positive news like Bitcoin ETF approval or increased institutional investment fails to excite the market. In contrast, it immediately crashes on geopolitical risks or regulatory concerns.
This pattern has become more pronounced in recent months. While domestic stock markets rose nearly 25% this year, ranking among the top global performers, Bitcoin and Ethereum remain stuck over 50% below their peak. While US stock custody amounts tripled in two and a half years, digital assets continued to retreat.
It's a truly harsh time for digital asset investors. The saying 'intelligence determines escape from departments' now seems to be changing to 'intelligence determines escape from digital assets'.
So what should be done? The answer is clear. Now is not the time to endure, but to boldly cut losses.
Trump warned that he would respond to "any Iranian retaliation with greater force". The possibility of blocking the Hormuz Strait jumped from 9% to 46% in just one day. Powell froze the benchmark interest rate and lowered the economic growth forecast for the second half. Liquidity expansion is becoming increasingly distant.
All of this is poison for digital assets. As geopolitical risks increase, money flows into safe-haven assets. Traditionally, June is a cautious month in the digital asset market, and this year is compounded by Middle Eastern war risks.
Individuals cannot beat the market. On-chain indicators, RSI, or Bollinger Bands are powerless before a single Trump announcement. Before geopolitical risks, all technical analyses become mere scraps of paper.
In this situation, averaging down is suicidal. The moment you think "it can't possibly drop further" and make additional purchases, a larger crash awaits. Many investors think "it's already dropped 50%, what else could happen?", but falling from 50% to 80% happens in an instant. One must not forget that a 90% decline is entirely possible in the digital asset market.
If investment funds are currently invested, cutting losses is the only path to survival. Predetermine a loss line of 1-2% of total assets, and when that line is reached, cut without hesitation. It hurts right now. I acknowledge that. But this pain will protect the assets that can provide greater opportunities later.
Cutting losses is not defeat, but a strategic retreat. To survive in war, sometimes you must abandon your position and withdraw. Especially in a market overly sensitive to bad news like now, thorough risk management is the key to survival.
There's no need to despair. Money circulates. Each asset class has its cycle. Remember when Bitcoin hit $70,000 in 2021? At that time, traditional markets were struggling.
When US interest rates start to drop, the period of digital asset strength will return. When liquidity expands and investment sentiment for risk assets recovers, that will be the spring for digital assets. However, to reach that spring, you must endure now. If you lose your entire fortune through reckless persistence, you'll have no money to invest even when good opportunities arise.
Now might also be a good time to leave the market and cool your head. Instead of stressing over charts, it might be better to study something new or explore other rising investment opportunities.
Just be patient and wait a little. Patience is the most important virtue in investing. Today's pain will bring greater future returns. But remember, to ensure you're ready for when the market revives, you must absolutely adhere to your loss-cutting line.
All investment responsibilities rest with the investor. This column represents personal views and is not an investment recommendation.
