Bitcoin took a nosedive, losing over 5% on Tuesday, and leaving a trail of chaos in the crypto markets. Liquidations exploded, with long positions feeling the heat—$453 million was wiped off the table, and short positions added $73 million to the carnage, according to CoinGlass.
Bitcoin struggled to stabilize, and by early Wednesday, the price sat at $61,720—down 3.5%. Ethereum wasn’t spared either, crashing over 6% to $2,480, based on CoinGecko data. Traders were left stunned, but some analysts tried to calm the storm, suggesting this meltdown wasn’t the start of a prolonged market downturn.
Geopolitics Fuel the Crypto Crash
The sell-off didn’t come out of nowhere. The Israel Defense Forces (IDF) confirmed that over 100 missiles were launched from Iran, hitting cities like Tel Aviv and Jerusalem. This sudden spike in geopolitical tension sent shockwaves across the markets. Military analysts, like Alistair Bunkall, quickly labeled the attack “far bigger” than anything seen earlier this year.
These events spooked the crypto world, so investors reacted fast, pulling funds out of spot ETFs. Bitcoin spot ETFs saw a net outflow of $243 million on October 1, ending eight consecutive days of inflows, according to SoSo Value. Fidelity’s ETF took a major hit, shedding $144 million, while ARKB followed closely behind, losing $84.3 million. Despite some positive movement from BlackRock’s IBIT ETF, which gained $40.8 million, the overall market sentiment remained negative.
Miners and Exchanges Feel the Heat
But it wasn’t just cryptos and ETFs that faced the storm—stocks tied to the crypto sector crumbled as well. Bitcoin miners saw their shares plummet, with Marathon Digital (MARA) down 9% and CleanSpark (CLSK) losing nearly 6%. Riot Platforms (RIOT) and Core Scientific (CORZ) dropped about 4%. Coinbase, the leading U.S. exchange, felt the pain too, with its shares sinking by 8%.
So the sell-off stretched across the entire space, and Avinash Shekhar, CEO of Pi42, pointed out that Bitcoin’s next bullish momentum might not kick in until late October. “Fed’s push for lower interest rates might pump life back into the markets, but it’ll take time,” he added. Altcoins like Ethereum could bounce back first, giving some hope to battered traders.
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