Bitcoin fell by 3.2 percent, Ethereum by 6 percent, XRP by 4.2 percent, and Solana by 3.4 percent on October 8. This comes as leveraged bets were unwound in the market, with 700 million Dollars in cryptocurrency positions liquidated in the last 24 hours, according to Coinglass.
Liquidation of Long Positions: Dan Khus
“The dip in crypto prices serves as a leverage flush instead of a downward trend, stemming from crowded bets on higher prices being forced out, with most of the liquidations coming from long positions” according to Dan Khus.
Risk Appetite, a Key Driving Force. Crude Oil, Treasury Yield, S&P 500 Performance
Risk appetite is, in the lens of analysts, the driving force in the recent performance of cryptocurrencies. Traders are looking forward to the interest rate announcement by the Federal Reserve: “A hawkish read could lift yields and the US dollar, keeping pressure on risk assets”. Investors are currently moving towards safer investments: the S&P 500 closed at an all-time high. The 10-year Treasury yield climbs above 5.3 percent; and 30-year Treasury yield climbs to 5.7 percent, the highest since 2002. External factors also play a key role. The Iran oil crisis has spooked investors—lowering the risk appetite of the overall market. The price of Brent crude rose above 100 U.S. Dollars per barrel.
Bitcoin below 83,000 Dollars as of October 8: A Risk Appetite Shift
As of October 8, Bitcoin fell below 83,000 U.S. Dollars. This reflects the risk-appetite shift that has prompted leveraged bets to be liquidated. 124,276 traders liquidated their positions. The total cryptocurrency total market capitalization fell to 2.9 trillion U.S. Dollars, wiping out over 100 billion U.S. Dollars from the market cap.
Federal Reserve, Treasury Yields, and Future Behaviors for Investors
This is in contrast to weak September job data, which has prompted a lower Treasury Yield interest rate that increased risk appetite for investors. As the minutes of the September meeting within the Federal Reserve will be released soon, investors are watching out for market signals that would affect their trading behavior.
