The month of October, traditionally favorable to Bitcoin, begins under gloomy auspices. A sharp drop in prices caused the liquidation of positions worth more than $500 million in 24 hours, calling into question the usual optimism of investors for this month nicknamed “Uptober”.
A frosty start to the month for cryptos
The euphoria that reigned in the crypto market suddenly dissipated at the beginning of October. Bitcoin, the spearhead of the sector, briefly plunged below the symbolic $61,000 mark before stabilizing around $61,605. This fall brought the entire market in its wake, with the total capitalization of cryptocurrencies contracting by 3.29% to reach $2.16 trillion.
This sudden withdrawal is partly explained by a movement of caution among 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 values deemed safer, such as physical gold, temporarily abandoning digital assets.
The Santiment analysis platform had however noted an extremely positive sentiment from the crypto community heading into this week. This heightened optimism probably contributed to amplifying the correction, confirming the adage according to which general euphoria is often a harbinger of an imminent market turnaround.
An unprecedented wave of liquidations
The fall in prices triggered a devastating domino effect on leveraged positions. According to the data from CoinGlass, no less than $525 million in positions were liquidated in the space of 24 hours on the main exchange platforms. Even more worrying, 85% of these liquidations concerned long positions, a sign of excessive optimism among traders.
Bitcoin was hit the hardest with $139 million in positions liquidated, followed closely by Ethereum with $109 million. In total, more than 155,000 traders had their positions forced to close. The largest liquidation, worth $12.66 million, involved a BTC/USDT pair on the Binance platform.
This series of massive liquidations is a reminder of the inherent fragility of the crypto market, where leverage can quickly amplify price movements in either direction.
The Uptober myth put to the test by the facts
Historically, October has always been a good month for Bitcoin. Over the last ten years, crypto has recorded an average performance of 20.69% over this month, only finishing in the red twice, in 2014 and 2018. This trend gave birth to the concept of “Uptober” in the crypto community.
However, the catastrophic start of October 2024 calls this belief into question. Investors are now wondering if 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 remains in order. The crypto market has once again proven its extreme volatility, reminding investors of the importance of rigorous risk management. The long-awaited Uptober could well turn into “Downtober” if the current trend were to be confirmed.
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