Bitcoin dropped below $84,000 after Iran stepped up attacks on tankers in the Strait of Hormuz, sending oil prices higher and reviving fears that rates will stay elevated for longer. The move triggered a sharp jump in liquidations, with ether and smaller tokens falling harder than bitcoin itself.
Bitcoin fell 2.7% on Wednesday, hitting its lowest level since Oct. 2, after Iran stepped up attacks on tankers in the Strait of Hormuz and dimmed hopes that shipping through the waterway would return to pre-war levels. CoinDesk put the token at $83,828.19, slipping below $84,000 shortly after midnight UTC as Brent crude climbed above $101 a barrel and Treasury yields and the dollar rose.
Oil Rally Revives Rate Fears
Higher oil prices are stoking inflation concerns and raising the odds of further rate hikes from major central banks, a scenario that could weigh on cryptocurrencies. Investing.com reported that Brent crude rose above $102 a barrel, while the U.S. 10-year Treasury yield climbed above 5.3% as bond markets priced in the rate-hike prospect. Minutes from the Fed's September meeting, when it raised rates by a quarter point, are due later Wednesday, and weaker jobs data has made another increase this month look less likely, Dan Khus, chief analyst at LVRG Research, told CoinDesk.
Altcoins and Crypto Stocks Slide Harder
Ether slumped 4.9%, while XRP fell 3.8% and Solana lost 2.1% as a wave of forced selling swept across crypto trading platforms. Crypto-linked shares also slid in premarket trading: Coinbase Global dropped 2.3%, Robinhood Markets fell 2% and Block lost 0.7%. CoinDesk reported that the CoinDesk 80, which tracks a wider basket of smaller tokens, dropped nearly 4% over 24 hours against 2.5% for the CoinDesk 5, as Optimism's OP token led losses after Pudgy Penguins' Abstract became the second Ethereum layer-2 network to shut down in a week.
Liquidations Surge as Leverage Unwinds
Liquidations climbed 235% to $547 million over the past 24 hours, according to CoinGlass data cited by CoinDesk, with ether positions accounting for $174 million of the total. Crypto News Flash separately reported that CoinMarketCap data showed crypto open interest near $407.1 billion, up 6.8%, with leverage concentrated on the long side: longs made up about 92% of the roughly $797.6 million liquidated over the past 30 days. Bitcoin still trades about 22% above the $68,900 trader realized price that CryptoQuant tracks as the aggregate cost basis of active traders, leaving the correction shallow so far.
Sources: Investing.com, CoinDesk, Crypto News Flash
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