Crypto Markets Suffer Significant Losses as Geopolitics Weighs on Sentiment

The digital asset market has seen significant weakness in the first quarter of 2026, with Bitcoin's return on investment (ROI) reaching -23.21%, marking one of the worst quarterly performances since 2013. This is even more pronounced when compared to its historical Q1 average of +45.90%, which is heavily skewed by extreme years like 2013 and 2021.

Ethereum also experienced a decline, recording a -32.17% return in Q1 2026, falling well below its historical quarterly average of +66.45%. This suggests that the market is facing more than routine volatility, with liquidity contraction and macro risk repricing contributing to the decline.

Derivatives market data shows signs of forced selling, with a sharp spike in sell orders triggered by rising US-Iran geopolitical tensions. Market analyst CryptoTice noted that around $1.8 billion in aggressive sell orders hit derivatives books within a single hour, indicating urgency-driven selling rather than a rotation.