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Historically, October is often referred to as “Uptober” in the crypto world and is celebrated with increases. However, this year, October started with great turmoil due to the increase in geopolitical tensions between Israel and Iran.
This conflict had a major impact on global markets, and cryptocurrencies were also hit hard by these negative developments.
Bitcoin Dropped to $60,200 Due to Liquidations
On October 1, Iran launched a massive missile attack on Israel. This attack, which was recorded as the second this year, came after a similar attack in April. Israeli Prime Minister Benjamin Netanyahu warned that a harsh response would be given.
These developments increased uncertainty in global markets and negatively affected cryptocurrencies. With the escalation of tensions, the value of Bitcoin experienced a rapid decline and fell 6% from $64,000 to below $60,200. This decline triggered massive liquidations, with liquidations reaching $523.37 million in the last 24 hours, according to Coinglass data.
Long positions were the most affected by this process, with $451 million worth of positions liquidated. Short positions lost more than $71 million. Market volatility caused 154,011 investors to liquidate their positions, with a single order worth $12.66 million on the BTCUSDT trading pair on Binance being the largest liquidation.
US spot Bitcoin ETFs also saw significant outflows. According to SoSoValue data, a total outflow of $242.53 million occurred on October 1. This was the largest outflow in almost a month and the third largest outflow in the last five months.
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Fidelity Wise Origin Bitcoin Fund (FBTC) experienced the largest outflow, losing $144.67 million. Other funds, such as the ARK 21Shares Bitcoin ETF (ARKB), also saw significant pullbacks. However, BlackRock’s iShares Bitcoin Trust (IBIT) bucked the trend, bringing in $40.84 million and continuing without an outflow for 15 days.
These market events also affected investor sentiment. The crypto fear and greed index fell into the “fear” category, falling from a neutral level of 50 the day before to 42. This change shows how sensitive the market is to external geopolitical events and how strongly these events can affect investor behavior.
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