Key Points
- The cryptocurrency market saw a significant loss, fueled by escalating geopolitical tensions in the Middle East.
- Bitcoin, Ethereum and other major cryptocurrencies suffered losses, with over $500 million liquidated from the market.
The cryptocurrency market experienced a significant downturn, wiping out $500M in both long and short positions. This downturn was primarily driven by increasing geopolitical tensions in the Middle East.
On October 2nd, the cryptocurrency market was in the red, with the total market capitalization falling by over 5% to $2.25 trillion.
Major Cryptocurrencies Affected
Bitcoin (BTC) fell under bearish pressure, dropping to a seven-day low below $61,000. Other altcoins also saw their recent gains erased, with Ethereum (ETH) falling by 6.5% to trade at $2,473.
Other cryptocurrencies such as Binance Coin (BNB) and Solana (SOL) also experienced losses, falling by 4.9% and 5.7% respectively. Ripple (XRP) fell below $0.60 after a 3.6% dip.
Dogecoin (DOGE), one of the top ten largest cryptocurrencies by market capitalization, recorded the most significant losses, falling by 9% to trade at $0.108.
Geopolitical Tensions Impact Crypto Market
The widespread losses were largely attributed to escalating geopolitical tensions in the Middle East after Iran fired hundreds of missiles toward Israel. This event led to increased anxiety among traders regarding the performance of risk assets.
During such uncertain times, investors often move away from risk assets such as cryptocurrencies and seek safe-haven assets. For instance, as crypto prices fell, gold saw minimal losses of less than 1%.
Data shows that more than $500 million was liquidated from the market in the last 24 hours, with $450 million of these being long positions. These liquidations affected more than 155,000 traders.
Bitcoin and Ethereum saw the highest liquidations of $140 million and $110 million, respectively. The largest single liquidation occurred on Binance, where one trader was liquidated for more than $12 million.
Crypto ETFs See Outflows
U.S. spot Bitcoin exchange-traded funds (ETFs) saw $242 million in outflows on October 2nd, the highest level since early September. Fidelity’s Bitcoin ETFs saw the largest outflow of $144 million.
Ethereum ETFs also posted negative results with $48M in outflows, the highest level in over a week.
This negative data coincides with the Bitcoin Fear and Greed Index plunging to 42, its lowest score in more than two weeks, indicating a high level of fear in the market.
