Historically, October has been a bullish month, often celebrated as “Uptober.” However, this year, October began in a period of considerable unrest, as geopolitical tensions between Israel and Iran escalate.
This conflict has had a huge impact on global markets, with cryptocurrencies being hit the hardest.
Bitcoin Falls to $60,200 Due to Crypto Liquidations
On October 1, Iran launched a major missile attack against Israel. This is the second such attack this year, following a similar incident in April. The situation prompted a stern warning from Israeli Prime Minister Benjamin Netanyahu, who promised “consequences” in retaliation.
These events have plunged global markets into a state of heightened uncertainty, significantly affecting cryptocurrencies.
As tensions rose, the crypto market saw immediate repercussions. Bitcoin’s value fell just below $60,200, marking a sharp 6% decline from its previous high of around $64,000. As a result, the market has witnessed numerous liquidations, with Coinglass reporting that liquidations over the past 24 hours amounted to a staggering $523.37 million.
Read more: How to trade crypto on Binance Futures: Everything you need to know
Long positions were mainly hit, with $451 million liquidated, while short positions saw more than $71 million wiped out. This market volatility led to the liquidation of 154,011 traders, with the largest single order valued at $12.66 million on Binance in the BTCUSDT pair.
Additionally, spot Bitcoin ETFs in the United States have seen significant outflows. Data from SoSoValue indicates that as of October 1, there were total outflows of $242.53 million, representing the largest outflow in almost a month and the third largest in five months.
The Fidelity Wise Origin Bitcoin Fund (FBTC) saw the largest outflow, losing $144.67 million, followed by substantial withdrawals from the ARK 21Shares Bitcoin ETF (ARKB) and other funds. Conversely, BlackRock’s iShares Bitcoin Trust (IBIT) bucked the trend, seeing an inflow of $40.84 million, continuing its 15-day streak of no outflows.
Market events also influenced investor sentiment. The crypto Fear and Greed Index has now regressed into the “fear” category, dropping to a level of 42 from a neutral score of 50 the day before. This shift highlights the market’s sensitivity to external geopolitical disruptions and their powerful ability to influence investor behavior.
Read more: What is the Crypto Fear and Greed Index?
Despite the current slowdown, some market experts remain optimistic about Bitcoin’s prospects. André Dragosch, European Head of Research at Bitwise, suggests that Bitcoin tends to recover well after major geopolitical risks.
“Geopolitical news should generally fade,” Dragosch said.
Echoing this sentiment, a recent report from BlackRock sees Bitcoin as a viable safe haven during global crises. The report praises Bitcoin’s decentralized and non-sovereign characteristics, which protect it from geopolitical shocks and economic uncertainties that often affect traditional assets.
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