Worsening relations between Iran and Israel caused a shocking $860.82 million worth of cryptocurrency to be liquidated in just 24 hours. If you saw this sell-off reported by QCP Capital, it sent shockwaves through the crypto world as investors became scared of global instability.
Investors have generally avoided riskier assets during times of geopolitical unrest and opted for safer investments. During the recent market drop, traders clearly fled to safer investments, as many rushed to sell their crypto stocks. Many people were affected. The sell-off was the worst for 261,054 buyers, and the market cap of all cryptocurrencies fell by almost 5%.
Iran Tensions Spur $860M Crypto Sell-Off, QCP Capital Analyzes
Leading crypto market player QCP Capital pointed out how the Ethereum (ETH) risk reversal signal worsened liquidation. The company saw a clear downward skew in the ETH risk reverse, meaning Ethereum’s value was about to decline. Traders’ desire to bet on ETH’s price going down to protect themselves from market instability made people more pessimistic.
As Ethereum’s value dropped by over 5% and finally settled at $3100, it was clear that this technical signal was right on the mark. It was stressed even more how sensitive ETH prices are to changes in market sentiment, especially since speculators with long positions in altcoins bought ETH puts to protect themselves from possible drops.
The prevailing fear in the crypto markets was palpable, mirrored in the negative swing of perpetual swap funding rates. Plummeting to over -40%, these rates represented the deepest negative funding witnessed this year, indicating a pronounced bearish sentiment among traders.
Furthermore, the anxiety-induced downturn crushed the forward curve, with the front end dipping below 10%. This dismal outlook underscored the prevailing pessimism regarding cryptocurrency prices in the short term.
As geopolitical tensions continue to escalate, the crypto market remains on edge, with investors closely monitoring developments for further signs of volatility.
