Bitcoin falls as US$650 million in risky crypto bets wiped out
The losses reflected a broader cooling in appetite for risk
CRYPTOCURRENCIES fell on Wednesday (Oct 7) as a wave of forced selling swept across digital-asset venues, with broader market jitters further weighing on risk appetite.
Bitcoin, the largest token, fell as much as 2.8 per cent to US$83,248, while Ether slumped 5.3 per cent to US$2,555. Other smaller digital assets also fell, with XRP and Solana each down by more than 4 per cent. Shares of crypto-linked companies retreated, with Coinbase Global dropping as much as 3.7 per cent and Strategy slipping 4.5 per cent.
The digital-asset retreat accelerated as leveraged bets were unwound, with roughly US$650 million in crypto positions liquidated over the last 24 hours, according to data compiled by Coinglass.
The losses reflected a broader cooling in appetite for risk, as renewed Iranian attacks in the Strait of Hormuz tempered hopes that shipping through the key waterway may return to pre-war levels, pushing Brent crude above US$100 a barrel.
“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,” said Dan Khus, chief analyst at LVRG Research.
US stocks edged lower after the S&P 500 closed at an all-time high in the prior session. Europe’s Stoxx 600 snapped three straight days of gains, while a recovery in bonds also lost steam, with the 10-year Treasury yield climbing above 5.3 per cent.
Traders are watching the release of Federal Reserve meeting minutes later on Wednesday for clues to the outlook for interest rates, said Rachael Lucas, an analyst at BTC Markets. “A hawkish read could lift yields and the US dollar, keeping pressure on risk assets,” Lucas said.
The slump in crypto prices comes after a recovery from Bitcoin’s summer lows, although it remains well off its peak of US$126,000 a year ago.
Trading may remain choppy for the rest of the week in the absence of a fresh catalyst, according to Pratik Kala, a portfolio manager at Apollo Crypto. “If we lose US$83,000 it is possible we revisit the US$78,000 region for Bitcoin which should provide some support,” he said. BLOOMBERG
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