On Monday evening, the cryptocurrency market capitalization dropped by 5%, driven by escalating tensions in the Middle East. This geopolitical development disrupted the growth of risk assets, including cryptocurrencies.
Liquidation of Crypto Bets Worth Half a Billion Dollars
Nearly half a billion dollars in #bullish cryptocurrency bets were liquidated as the market came under geopolitical pressure. According to data from CoinGlass, 86% of traders were optimistic about the future of the crypto market in October. However, in the past 24 hours, futures tied to major cryptocurrencies saw liquidations worth over $450 million. The Bitcoin (#BTCâ ) plunge led to losses among all major tokens, with some dropping as much as 8% in value.
Losses for Bitcoin and Ethereum Traders
Data from CoinGlass also shows that traders betting on Bitcoinâs price increase lost more than $122 million. Bets on Ethereum (#ETHđ„đ„đ„đ„ ) faced losses of nearly $100 million. Smaller cryptocurrencies, known as altcoins, saw liquidations totaling over $85 million, marking the highest levels since July. Interestingly, the memecoin Pepe (#pepe⥠) experienced unusually high liquidations of $10 million.
What is Liquidation and How Does It Affect the Market?
Liquidation occurs when an exchange forcibly closes a traderâs leveraged position due to an inability to meet margin requirements. Large liquidations often indicate extremes in the market, such as panic selling or buying. A cascade of liquidations can signal a market turning point, where an overreaction to market sentiment could reverse prices.
Geopolitical Tensions and Bitcoin Price Drop
Global stocks and risk assets, including #bitcoinâïž , were hit on Tuesday after Iran launched missiles at key Israeli areas. Israel has threatened retaliation, which could escalate tensions in the coming days. BTC dropped to as low as $60,300, marking the worst start to a month that is historically known for its bullish trends. However, by Wednesday, Bitcoin recovered to $61,500 during Asian trading hours.
Significant Losses for Futures Traders
This drop caused substantial losses for futures traders, marking the largest since early August. Data shows that nearly 86% of all futures bets were bullish. Traders were expecting higher prices in the coming weeks, as October has traditionally favored BTC, with only two negative months since 2013.
Traders' Expectations and the $70,000 Bitcoin Target
Market conditions in recent weeks, including global monetary policy and U.S. political support, indicated a continued upward trend. Some traders are targeting a BTC price of $70,000 in the upcoming weeks.
Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.â
