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Bitcoin and Ethereum Plunge After $19 Billion Risky Position Sell-Off

Market Overview: The prices of Bitcoin and Ethereum dropped on October 10 due to a sell-off in high-risk positions, triggered by geopolitical tensions and macroeconomic uncertainty.

Key Points:

  • $19 billion in risky positions were sold following US President Trump's announcement of new tariffs on China.
  • The crash resulted in Bitcoin falling by about 4% and Ethereum by 8.6%, marking the first negative October since 2018.
  • A US government shutdown and a Federal Reserve rate cut had already undermined investor confidence before the sell-off.
  • Overall crypto market capitalization decreased by 6.1%, indicating a significant pullback from risky assets.

Market Resilience and Recovery:

  • The market quickly rebounded, with high-risk positions recovering to 5.77% by October 31, up from below 5%.
  • Bitcoin's market share increased to 59.4%, showing a shift towards safer assets.
  • Ethereum continued to attract institutional interest, with treasury holdings reaching 5% of total ETH supply.
  • The BVoL index suggests that investors do not anticipate a prolonged crash, as it peaked at 52, below the year's high of 88.

Ethereum price chart

Conclusion: The October 10 crash served as a reset for risky positions rather than signaling a trend reversal. However, the quick market recovery indicates resilience, though vulnerability to future macroeconomic shocks remains.