Bitcoin and other major cryptocurrencies have experienced sharp price fluctuations following the controversial Tether report amid rising tensions in the Middle East.
These events resulted in significant losses for traders holding highly leveraged positions, and daily liquidations soared to approximately $380 million.
Tether’s repudiation failed to ease markets as Bitcoin and altcoins liquidate rapidly
On October 25, the Wall Street Journal published an article suggesting that the U.S. Attorney’s Office is investigating Tether. The report said the allegations include the possibility that third parties may have used Tether’s platform to conduct illegal activities.
Tether strongly denied the accusations, calling the article “reckless” and based on “unsubstantiated claims.” In a public statement, Tether emphasized the lack of official confirmation from authorities and criticized the article’s reliance on unconfirmed sources. Tether’s USDT is the industry’s largest stablecoin, with a market capitalization of approximately $120 billion.
“At Tether, we regularly and directly work with law enforcement authorities to prevent the misuse of USDt by rogue states, terrorists, and criminals. Based on that, we can confirm that the claims in the article are demonstrably false,” said Tether CEO Paolo Ardoino.
Read more: A guide to the best stablecoins of 2024
This news led to a bearish shift in the market, halting Bitcoin’s attempts to break above $70,000. This level was the first in three months. According to data from BeInCrypto, the price of Bitcoin plummeted, hitting an intraday low of $66,500 before rebounding slightly to around $66,932 at the time of writing.
Other major digital assets also declined. Solana, Ethereum, Avalanche, and Binance BNB each suffered losses of over 4%.
Meanwhile, investor confidence took a further hit as escalating tensions in the Middle East affected risk appetite. Israel has announced direct strikes against Iran in response to recent missile attacks, raising concerns that ongoing hostilities could escalate into a broader regional conflict.
Combining these factors, daily liquidations amounted to approximately $380 million, with most of the losses falling to long traders who had bet on rising prices. Long traders lost $310 million, while short traders lost $68.19 million.
Read more: Bitcoin Price Prediction 2024/2025/2030
Clearing of the virtual currency market. Source: Coinglass
Altcoins were the hardest hit, with more than $90 million in liquidations, according to Coinglass data. Bitcoin and Ethereum followed, experiencing liquidations of $65 million and $58 million, respectively.
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