Crypto Market Loses Over $100 Billion in Three Days Amid Geopolitical Tensions and Rising Yields

The cryptocurrency market experienced a significant downturn, losing over $100 billion in value within a three-day period. This selloff, which peaked around September 24, saw Bitcoin's price drop to approximately $84,000 and Ethereum fall to between $2,670 and $2,687. Altcoins suffered even greater losses on a percentage basis, reflecting the broader market's volatility.

The decline was triggered by a combination of factors, including the 10-year US Treasury yield surpassing 5%, which historically prompts investors to seek safer assets. Additionally, geopolitical tensions were heightened by Iranian President Masoud Pezeshkian's speech at the United Nations, which led to a US delegation walkout. This uncertainty contributed to a risk-off sentiment across various asset classes, including cryptocurrencies.

Automated liquidations exacerbated the situation, with around $450 million in long positions liquidated on the day of the crash. Cumulative liquidations over the ten-day period reached $7.3 billion. Despite the price drops, on-chain transaction activity remained steady, indicating that the fundamental utility of cryptocurrencies persisted even as speculative trading faltered. Traders are now closely monitoring the high open interest in perpetual futures markets, which suggests that the market remains vulnerable to similar shocks until conditions stabilize.

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Source: KLEA News