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Bitcoin (BTC) Price Drops to $66,000, Altcoins Are in Free Fall as Crypto Liquidations Rise to $850 Million
Cryptocurrencies tumbled on Friday as risk-off sentiment in traditional markets amid flaring geopolitical risks spread to digital assets.
In quick afternoon bearish action during US trading, bitcoin (BTC) it plunged below $66,000 after challenging the $71,000 level a few hours earlier. As of this writing, bitcoin had rebounded to $66,700, down more than 5% in the past 24 hours.
Ether (ETH)the second-largest cryptocurrency by market cap, fell 12% to $3,100 before a modest rebound narrowed the decline to 8%.
Smaller cryptocurrencies suffered even heavier losses in the panic-driven action. The broad market CoinDesk 20 Index (CD20) is down nearly 10%, with Cardano ADAAvalanche AVAXbitcoin cash (BCH)currency (FIL) and aptos (APT) falling by 15-20%.
The draw triggered the largest leverage washout in a month, liquidating about $850 million in leveraged derivatives trading positions across digital assets. CoinGlass data Shows. About $770 million of these positions were long positions betting on rising prices, caught by surprise by the sudden drop.
The drop came as stock markets tumbled during the US trading session amid growing fears of a widening conflict in the Middle East, while US authorities warned that Iran may be preparing to launch a significant attack against Israel.
Treasuries and the U.S. dollar index (DXY) rose as traders flocked to hedges, while the major U.S. stock indexes S&P500 and Nasdaq 100 fell 1.7% an hour before the close of trading trading session. Gold, long seen as a safe haven, jumped above $2,400 to a new all-time high before paring its gains, while oil rose 1%.
Digital asset investment firm Ryze Labs, formerly Sino Global Capital, said in a commentary on Friday that it anticipates some “near-term market softness” for cryptocurrencies due to the upcoming tax season. However, he maintained a more constructive long-term outlook, expecting relief for the asset class as policymakers slow quantitative tightening and potentially adjust monetary policy to facilitate rollovers of U.S. government debt.