The crypto market cap is down 6%, with more than half a billion crypto bets liquidated amid growing geopolitical tensions in the Middle East.
Middle East tensions shake crypto market
The total crypto market cap fell 6%, sliding to $2.24 trillion at press time, as geopolitical tensions between Iran and Israel escalate. Iran launched ballistic missiles at key Israeli sites yesterday, causing market volatility as Israel vowed to retaliate in the coming days.
According to data from CoinGlass, more than $556 million in futures contracts were liquidated in the last 24 hours. Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) saw liquidations worth over $143 million, $119 million, and $20 million, respectively.
Of the $556 million in futures contracts liquidated, 86.6% – or $482.2 million – were long positions, while the remaining 13.4% – or $74.6 million – were long positions. short. A total of 167,802 traders were liquidated in the last 24 hours, with the largest liquidation order on Binance’s BTCUSDT pair worth $12.6 million.
Binance accounted for 49.1% of total liquidations, with $273.4 million liquidated on the platform. It was followed by OKX, Bybit, and HTX, which recorded liquidations totaling $182.6 million, $43.3 million, and $40.2 million, respectively.
For the uninitiated, crypto liquidations occur when a trader’s position is automatically closed by an exchange because they do not have enough funds to cover potential losses or margin requirements.
Liquidations typically occur in leveraged trading, where traders borrow money to increase their position size. The exchange liquidates its assets if the market moves against them beyond a certain point to avoid further losses.
Large liquidations – like those seen over the past 24 hours – indicate high volatility in the market, often triggered by sudden price drops or rises. They may suggest that many traders with leveraged positions were caught off guard by these volatile moves, leading to forced selling or buying. This can further amplify market instability, as liquidations create cascading effects on prices.
It is worth noting that the majority – ranging from 83% to 99% – of these liquidations were long positions, indicating that traders expected asset prices to continue rising through October. Historically, October has been one of the most bullish months for BTC.
Bullish sentiment remains in the market
With the recent drop in digital asset prices, October was not the start of the bulls hoped For. Since 2013, October has only yielded negative returns on BTC twice, making it a historically bullish month for digital assets.
Several crypto analysts maintain bullish outlooks for October and the fourth quarter of 2024. For example, a recent report from 10x Research note that there are “exceptionally high” chances of a crypto rally before the end of the year.
Likewise, a report by Bernstein apply that a victory by Republican presidential candidate Donald Trump in the November US presidential elections could propel Bitcoin as high as $90,000 in the fourth quarter of 2024. BTC is trading at $61,448 at press time, down 2 .5% in the last 24 hours.
Featured image from Unsplash.com, charts from CoinGlass.com and TradingView.com
