October, traditionally known as Uptober for its bullish trends, has begun with a significant downturn. The escalating geopolitical tensions between Israel and Iran have led to a shocking $523 million in liquidations across the crypto market.
On October 1, Iran executed a missile strike on Israel, marking the second attack this year. Israeli Prime Minister Benjamin Netanyahu responded with threats of retaliation, creating a climate of uncertainty that rippled through global markets.
As a result, Bitcoin’s price fell sharply to just below $60,200, representing a 6% drop from its previous high of approximately $64,000. This downturn triggered extensive liquidations, with Coinglass reporting a staggering total of $523.37 million liquidated within 24 hours.
A total of 154,011 traders faced liquidation, with the largest single order valued at $12.66 million on Binance for the BTCUSDT pair.
The turmoil also affected U.S. spot Bitcoin ETFs, which recorded significant outflows. Data indicated an aggregate withdrawal of $242.53 million on October 1, marking the largest outflow in nearly a month.
Leading the outflows was the Fidelity Wise Origin Bitcoin Fund (FBTC), which lost $144.67 million. In contrast, BlackRock’s iShares Bitcoin Trust (IBIT) saw an inflow of $40.84 million, maintaining a streak of no outflows for 15 days.
The crypto fear and greed index fell to 42, indicating a shift from neutral to fear, underscoring the market's vulnerability to geopolitical events.
Despite the current bearish trend, some analysts remain optimistic. André Dragosch from Bitwise suggests that Bitcoin tends to recover after geopolitical tensions subside. A recent report from BlackRock highlights Bitcoin as a potential safe haven during global crises, emphasizing its decentralized nature.
