Middle East tension causes massive crypto market shakeup, $489 million liquidated

Bitcoin (BTC) crashed in tandem with stock markets on Oct. 1 as tensions continued to escalate in the Middle East after Israel announced ground operations in Lebanon, which has prompted Iran to take action.

The official account of Israel Defense Forces on X shared at 4:36 P.M. UTC that Iran was firing rockets at Israeli territory. Additionally, reports claim that Iran is likely to send a second wave of missiles targeting Israel in the ensuing hours.

As a result, over $489 million was liquidated over the past 24 hours, with the majority of liquidations — $312 million — occurring within the past four hours, according to Coinglass data.

Long liquidations accounted for $416.6 million of the total, while short liquidations amounted to roughly $73 million.

According to CryptoSlate data, BTC was trading at $61,598 as of press time, down 3% over the past day.

Major altcoins displayed heavier corrections following the news. Ethereum (ETH) was down 4.31% as of press time and trading at $2,490, while Solana (SOL) was down over 5.51% and trading at $146.8.

Toncoin (TON) and Dogecoin (DOGE) registered the worst performance, tumbling 6.2% and 7.3%, respectively, to $5.33 and $0.1063.

The Fear and Greed Index — which measures crypto investors’ sentiment daily — fell from the greed zone at 61 points to the neutral area at 50 points in 24 hours.

The US equities market also registered losses today, with the S&P 500 (SPX) shrinking 1.1% and the Nasdaq Index pulling back 1.85%. Nvidia (NVDA) stocks are down 4%, and Apple (AAPL) shares fell 3.6%.

Meanwhile, the US Dollar Index is up 0.6%, followed by a 1.1% leap registered by the Philadelphia Gold and Silver Index (XAU).

Jeroen Blokland, founder of the Blokland Smart Multi-Asset Fund, stated on X that investors are “literally selling” BTC to buy gold amid the intensification of the conflict. However, he added that Bitcoin’s average return as a hedge against geopolitical events has proven to be a good decision since 2020.

Citing a BlackRock report, Blokland highlighted that BTC outpaced the 60-day returns of SPX and gold during the US-Iran conflict and Covid outbreak in 2020, the deflagration of war between Russia and Ukraine in 2022, and the US banking crisis in 2023.

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