Hormuz Strait military drills trigger a global asset decline; bullish traders or have already set up large short positions

Iran’s live-fire naval exercises warning just went out, and the global financial markets immediately entered a rare “collective de-risking” mode. This is not ordinary daily volatility, but a typical case of geopolitical shocks directly impacting the market—tensions in the Strait of Hormuz are rewriting asset allocation logic. The crypto whales have long prepared short positions, waiting for such a moment.

Geopolitical Trigger Point: Escalation of Live-Fire Confrontation in the Strait of Hormuz

Iran announced that it will hold live-fire naval exercises in the Strait of Hormuz on Sunday and Monday, and this news quickly spread through the markets. Notably, the U.S. military is also conducting live-fire exercises in the same area at this time, escalating from “verbal deterrence” to “action-level confrontation.” Such a situation has been rare in recent years, and market pricing of geopolitical risks has accordingly changed.

As the gateway for global energy transportation, the security situation of the Strait of Hormuz directly affects international oil supplies. When this strategic passage faces uncertainty, market reactions tend to be very intense.

Asset Correlated Decline: Collective Sell-Off of Risk and Safe-Haven Assets

Oil prices surged accordingly, becoming the sole beneficiary, while other assets experienced a synchronized rapid decline:

Risk Assets Lead the Drop: Bitcoin sharply retraced from its high during this decline, currently hovering around $72.29K, with a 24-hour drop of -5.49%; Ethereum also followed suit, falling to around $2.14K. U.S. stocks also entered correction, with risk assets suffering across the board, becoming the main market tone.

Unusual Performance of Traditional Safe-Haven Assets: Gold and silver did not show the expected safe-haven characteristics and were instead heavily sold off. This phenomenon reflects extreme liquidity pressure—during sudden events, market participants often liquidate risk across asset classes to obtain cash liquidity.

Deep Market Logic: Whale Short Positions and Predictive Layout

Many traders see this decline as a “black swan” event, but in reality, this shift was anticipated by industry analysts. In fact, a comprehensive analysis five days ago had already broken down the current market logic chain. Crypto whales had long established over $3 billion in short positions at high levels, waiting for such a risk release moment.

From a market structure perspective, this whale layout strategy reflects their judgment of escalating geopolitical risks. When military activity in the Strait of Hormuz confirms escalation, these early short positions become the most immediate beneficiaries.

This phenomenon reminds market participants that, in environments of high geopolitical uncertainty, multi-asset correlated declines often follow deep market logic rather than random events. For investors, understanding these underlying market structures is often more critical than reacting to breaking news in real time.