Crypto: 500 Million $ Liquidated, "Uptober" Loses Its Magical Aura!

October, traditionally favorable for Bitcoin, begins under dark auspices. A sharp drop in prices led to the liquidation of positions worth more than $500 million in 24 hours, questioning the usual optimism of investors for this month, nicknamed “Uptober.”

A chilly start to the month for cryptos

The euphoria that reigned in the crypto market sharply dissipated at the beginning of October. Bitcoin, the flagship of the sector, briefly plunged below the symbolic $61,000 mark before stabilizing around $61,605. This drop dragged the entire market with it, with the total cryptocurrency capitalization contracting by 3.29% to reach $2.16 trillion.

This sudden decline is partly explained by a cautious move by investors in the face of escalating tensions in the Middle East. In this uncertain context, many players seem to have preferred to take refuge in assets deemed safer, like physical gold, temporarily abandoning digital assets.

The analysis platform Santiment had noted an extremely positive sentiment from the crypto community approaching this week. This heightened optimism likely contributed to amplifying the correction, confirming the adage that general euphoria often heralds an imminent market reversal.

An unprecedented wave of liquidations

The price drop triggered a devastating domino effect on leveraged positions. According to CoinGlass data, no less than $525 million in positions were liquidated within 24 hours on major exchange platforms. Even more worrying, 85% of these liquidations involved long positions, signaling excessive trader optimism.

Bitcoin was the hardest hit with $139 million in liquidated positions, followed closely by Ethereum with $109 million. In total, more than 155,000 traders saw their positions forcibly closed. The largest liquidation, worth $12.66 million, involved a BTC/USDT pair on the Binance platform.

This series of massive liquidations highlights the inherent fragility of the crypto market, where leverage can quickly amplify price movements in both directions.

The myth of Uptober in the face of facts

Historically, October has always been a prosperous month for Bitcoin. Over the past ten years, the crypto has recorded an average performance of 20.69% during this month, ending in the red only twice, in 2014 and 2018. This trend gave rise to the concept of “Uptober” within the crypto community.

However, the catastrophic start to this October 2024 questions this belief. Investors are now wondering whether the market will be able to rebound and follow the historical trend or if we are witnessing a paradigm shift.

In this climate of uncertainty, caution is still advised. The crypto market has once again proven its extreme volatility, reminding investors of the importance of rigorous risk management. The much-anticipated Uptober could well turn into “Downtober” if the current trend continues.