Bitrabo Editorial
The cryptocurrency market has experienced a 6% decline, with over $500 million in trades liquidated amid rising geopolitical tensions in the Middle East.
Middle East Tensions Impact Cryptocurrency Market
The overall value of the crypto market has fallen to $2.24 trillion as geopolitical conflicts between Iran and Israel intensify. Recently, Iran fired missiles targeting Israel, prompting a volatile market atmosphere as Israel has promised to retaliate soon.
As reported by CoinGlass, more than $556 million in futures contracts were liquidated in the last day. Liquidation amounts included approximately $143 million for Bitcoin (BTC), $119 million for Ethereum (ETH), and $20 million for Solana (SOL).
From the total liquidated, a major portion—86.6%, or about $482.2 million—were long contracts, leaving 13.4%, or $74.6 million, from short positions. In total, 167,802 traders had their positions liquidated in this timeframe, with the largest single order reaching $12.6 million on Binance’s BTCUSDT pair.
Binance was responsible for nearly half (49.1%) of the total liquidations, amounting to $273.4 million. Other platforms like OKX, Bybit, and HTX followed with liquidations of $182.6 million, $43.3 million, and $40.2 million, respectively.
In the context of cryptocurrency, liquidations occur when trading positions are closed by exchanges due to insufficient funds to cover losses or margin requirements.
These liquidations are common in leveraged trading scenarios, where traders borrow funds to increase their investment. If market conditions turn unfavorable, exchanges will liquidate positions to limit further losses.
The significant liquidations noted in the past day reflect severe market volatility, often the result of unexpected price fluctuations. Such situations can lead to forced buying or selling, which exacerbates market instability and can cause further price movements.
It’s important to note that a significant majority—between 83% to 99%—of the liquidations were long positions, suggesting that many traders anticipated a continued rise in asset prices leading into October. Historically, October has been a strong month for Bitcoin performance.
Continued Optimism in the Market
Despite the recent downturn in digital asset values, October hasn’t started off as many traders anticipated. Historically, since 2013, Bitcoin has only returned negative returns in October twice, marking it as a typically favorable month for cryptocurrencies.
Many analysts maintain an optimistic view for October and the latter part of 2024. A report from 10x Research highlighted a strong possibility for a crypto rally before the year’s conclusion.
Additionally, a Bernstein report suggests that should Republican candidate Donald Trump win the upcoming US presidential election in November, Bitcoin could soar to $90,000 by the end of Q4 2024. Currently, BTC is priced at $61,448, reflecting a 2.5% drop over the last day.
