$500M Crypto Liquidations Turns ‘Uptober’ to ‘Rektober’

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As a seasoned analyst with over two decades of experience in traditional and crypto markets, I’ve seen my fair share of market volatility and unexpected turns. The events of October 2021 have certainly added another chapter to that book.

Investors and analysts had high expectations for October, believing it would bring a one-of-a-kind market rally supported by historical “Uptober” data. However, their optimism was abruptly dashed when the cryptocurrency sector experienced an extraordinary amount of selloffs in just two days. Some market watchers have started referring to this traditional bullish month as “Sell-tober”.

Bitcoin Leads 24 Hours Crypto Liquidations

Based on figures from analytics tool CoinGlass, it’s reported that the market experienced a decline of approximately $10 billion in value at the start of the month. This decline was accompanied by over $540 million in liquidations. A cryptocurrency liquidation heatmap indicates that a staggering 161,000 traders were forced to liquidate their positions within the past day, amounting to a total of around $541.16 million in liquidations. Notably, the single largest liquidation order was made on Binance, amounting to $267 million.

As an analyst, I’ve noticed that Ethereum (ETH) accounted for approximately $227,180 in liquidations over the last hour. Simultaneously, EigenLayer (EIGEN) recorded around $161,140 in liquidations during the same period. However, it’s Bitcoin (BTC) that dominates the 24-hour liquidation figure, with a staggering $159,020 worth of liquidations, followed closely by Ethereum at about $111 million. On a 24-hour basis, Bitcoin leads all other cryptocurrencies in terms of liquidation, with a total of $143.26 million.

Bitcoin is currently valued at approximately $61,460.02 following a 3.95% decrease in its value. Some analysts suggest that this drop in BTC price might be due to a strong rejection at the $64,000 resistance level. Earlier, there was a short-lived bullish surge, resulting in a favorable close for Bitcoin during September.

People were optimistic that the October narrative favoring cryptocurrencies might enable Bitcoin’s price to recover an important upward trend and possibly set a new record high (ATH). The coin even made an effort to reclaim the 200-day Moving Average (MA) as a support point following Monday’s dip from $65,600 to around $63,200 due to the active futures market.

Will the Rektober Continue for Bitcoin?

If the coin’s head dips below $60,000, it could potentially continue to fall, possibly finding a new floor in the $50,000 support area. As an analyst, I’m keeping a close eye on this trend.

Right now, the leading cryptocurrency is attempting to hold crucial support points, showing no signs of significant decline. With massive sell-offs causing heavy liquidations, excessively leveraged trades have been eliminated. Optimism about Bitcoin maintaining its upward trend has led many investors to establish long positions.

In an unexpected turn of events, these extended positions were primarily responsible for the majority of liquidations. Cryptocurrency analysts and market experts are keeping a close eye on Bitcoin’s price fluctuations, speculating whether it can break free from its current downward trend and reach a fresh new high. It’s crucial to maintain Bitcoin above $60,000 to prevent a significant pullback.

For the crypto market to experience growth, it first needs to bounce back from significant sell-offs and reestablish its equilibrium. As the month progresses, potential assistance may come from the Federal Reserve’s and People’s Bank of China’s interest rate reductions, which could lead to higher closing prices for cryptocurrencies. The increased liquidity in the broader financial market could trigger fiat currency devaluation, compelling more institutional investors to safeguard their assets against inflation by investing in Bitcoin.

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2024-10-02 14:24