Altcoins plummet as geopolitical instability and long liquidations shake the market

On October 2, many major altcoins, including STRK, AR, LDO, and CORE, suffered double-digit losses as geopolitical tensions and long liquidations hit the crypto market.

Starknet (STRK) led the altcoin losses, falling 13.4% in the last 24 hours. While the transaction volume remained around 151 million dollars, the market value decreased by 13.75% to 772 million dollars.

Similarly, Arweave (AR) fell 14.3% to $19.98; daily trading volume was $226 million and market capitalization was $1.3 billion; The lowest level in the last seven days.

Lido DAO (LDO) was also down 12.7% at $1.16. Lido’s market value decreased to $1.03 billion with a daily volume of $179 million. Core (CORE) followed suit, falling 12.4% to $0.9292; daily trading volume fell to $50.4 million and market capitalization fell to $851 million.

Broader market conditions and Bitcoin’s role

The sharp decline in these altcoins coincided with a broader contraction in the cryptocurrency market; This showed that the total market capitalization fell by over 5.5% to approximately $2.26 trillion. This downturn occurred against a backdrop of increasing geopolitical instability, including Iran’s missile attacks on October 1 and a decline in US stocks; This has resulted in a weakened investor outlook for the traditionally bullish “Uptober”.

According to data from Crypto.news, the market’s anchor asset, Bitcoin (BTC), is down 3.2% over the past 24 hours, dropping nearly $4,000 to hit a two-week low of $60,315 today, according to data from Crypto.news. The decline was partly due to geopolitical developments that triggered a sell-off in risk assets in global markets.

BTC 24-hour price chart | Source: crypto.news

Although Bitcoin has recovered slightly to $61,850, the price action is in stark contrast to traditional safe-haven assets such as gold and oil. Gold reached a record level of $2,665 per ounce, with an increase of 1.4 percent. Crude oil increased by 7 percent to 72 dollars per barrel.

The rising value of gold, oil, the US dollar and bonds highlights the divergence between Bitcoin and traditional hedges and raises questions about Bitcoin’s status as a store of value in times of crisis.

Liquidations exacerbate market downturn

Data from CoinGlass shows the extent of market turmoil, with $453 million in long positions and $72 million in short positions liquidated in the last 24 hours. The liquidation of long-term trades, in which investors bet on price increases, increased selling pressure, further accelerating the decline.

This cycle of liquidations and sales tends to ripple throughout the altcoin sector, pulling the broader market down, especially in a volatile market.

Bitcoin needs to secure $71k

Master trader Peter Brandt noted that despite Bitcoin’s rise in the final weeks of September, it remains stuck in a seven-month pattern of lower highs and lower lows.

According to Brandt, only a close above $71,000 and a new all-time high could confirm that Bitcoin’s uptrend, which began in November 2022, remains intact.

The Crypto Fear & Greed Index, which measures market sentiment, fell to 42 from 59 (neutral) last week; This marks a shift towards fear as geopolitical risks scare investors.

Historically, Bitcoin has exhibited high volatility during stressful periods, as seen following the Israel-Iran conflict that triggered a major price correction earlier this year.

Looking ahead, the current geopolitical situation may continue to put pressure on the market, especially if conflicts escalate. Increased instability could lead to further sell-offs and increase volatility in the crypto world.