The start of October was expected to be bullish, but instead, cryptocurrency prices took a hit. So, what caused this market decline? Let’s put it in simple terms!
1. Geopolitical tensions in the Middle East
Recent tensions in the Middle East, particularly between Iran, Lebanon, and Israel, have raised concerns in global markets. Reports of possible missile attacks have raised alarm bells. As a result, oil prices are rising, which could lead to higher inflation, making it difficult for the US Federal Reserve to continue cutting interest rates. When the global economy feels uncertain, it often affects both traditional stocks and the cryptocurrency market. 📉
2. Cryptocurrency liquidations reached $340 million.
In the last 24 hours, long traders — those who bet on rising cryptocurrency prices — were surprised to see over $340 million in leveraged positions liquidated, meaning traders were forced to sell their positions at a loss, creating a domino effect of selling pressure. This forced selling has pushed cryptocurrency prices down.
Bitcoin fell to $61,000, down 2.6%.
Ether fell 12.6% before rallying slightly.
3. Stock market decline
It’s not just cryptocurrencies that are feeling the pressure. U.S. stock markets, including the S&P 500 and Nasdaq, have also seen significant declines. The correlation between stocks and cryptocurrencies remains strong, so when stocks decline, cryptocurrencies often follow.
4. Traders remain cautious but optimistic
Despite the decline, some traders remain optimistic. The funding rates for both Bitcoin and Ethereum remain positive, which means that many traders are willing to pay more to hold long-term positions, hoping that the market will recover soon.
In conclusion, a combination of geopolitical tensions, liquidations, and a falling stock market have led to this decline in the crypto space. But with many traders remaining optimistic, the market may soon recover. Stay tuned for more! #BinanceTurns7 #TopCoinsJune2024 #MarketDownturn #FavoriteToken $BTC $TON $WIF
