TLDR
Bitcoin plunged to $60,300, causing $450 million in bullish crypto bet liquidations
Crypto market cap dropped 5% due to Middle East tensions
86% of futures traders were positioned bullishly for October
Bitcoin and Ethereum saw over $220 million in combined liquidations
October has historically been a bullish month for Bitcoin
The cryptocurrency market experienced a significant downturn on Tuesday, October 1, 2024, as Bitcoinâs price plummeted to $60,300, its lowest point in recent weeks.
This sudden drop led to the liquidation of $450 million in bullish crypto bets, marking the largest single-day liquidation event since early August.
The decline in Bitcoinâs value rippled through the entire crypto market, causing an average 5% drop in overall market capitalization.
This downturn coincided with escalating tensions in the Middle East, as Iran launched missiles at key Israeli locations, prompting threats of retaliation from Israel.
The geopolitical unrest negatively impacted global equities and risk assets, including cryptocurrencies.
Data from CoinGlass revealed that Bitcoin traders betting on higher prices suffered losses exceeding $122 million. Ethereum, the second-largest cryptocurrency by market cap, saw nearly $100 million in liquidations.
Smaller alternative tokens, collectively known as altcoins, recorded over $85 million in liquidations, the highest such figure since July. Notably, the memecoin Pepe (PEPE) experienced an unusually high $10 million in liquidations.
The massive liquidation event occurred despite the fact that 86% of futures traders had positioned themselves bullishly for October.
Historically, October has been a favorable month for Bitcoin, with only two negative performances recorded since 2013.
This bullish sentiment was further fueled by recent market conditions, including global monetary policies and U.S. political support, which had led some traders to target a $70,000 price point for Bitcoin in the coming weeks.
A liquidation in the cryptocurrency market occurs when an exchange forcefully closes a traderâs leveraged position due to the traderâs inability to meet margin requirements.
Large-scale liquidations can often indicate extreme market conditions, such as panic selling or buying.
In some cases, a cascade of liquidations may suggest a potential market turning point, where a price reversal could be imminent due to an overreaction in market sentiment.
Despite the sudden downturn, Bitcoin showed signs of recovery in Asian trading hours on Wednesday, October 2, climbing back above $61,500.
This slight rebound offers a glimmer of hope for bullish traders who have faced significant losses in the past 24 hours.
The recent market volatility serves as a reminder of the inherent risks associated with cryptocurrency trading, particularly when using leveraged positions.
It also highlights the impact that global events and geopolitical tensions can have on digital assets, which are increasingly being viewed as risk assets alongside traditional financial instruments.
As the situation in the Middle East continues to develop, market participants will be closely monitoring its potential effects on the crypto market.
Additionally, traders and investors will be watching to see if October lives up to its historical reputation as a bullish month for Bitcoin, or if the recent downturn marks the beginning of a more prolonged bearish trend.
The post Bitcoin Falls to $60,300, Causing $450 Million in Liquidations appeared first on Blockonomi.
