Major cryptocurrencies, including Bitcoin, experienced significant price volatility following a contentious report regarding Tether, coinciding with rising tensions in the Middle East.
This turmoil resulted in considerable losses for traders with highly leveraged positions, with daily liquidations surging to approximately $380 million.
Tether’s Rebuttal Fails to Soothe Market as Bitcoin and Altcoins Face Significant Liquidations
On October 25, the Wall Street Journal issued a report indicating that the US Attorney’s Office was scrutinizing Tether. The allegations suggest that third parties might have utilized Tether’s platform for potentially illicit activities.
Tether vehemently rejected these claims, labeling the report as “irresponsible” and founded on “unverified information.” In a public statement, Tether highlighted the lack of any official confirmations from authorities and criticized the article’s dependence on unreliable sources. Tether’s USDT is recognized as the largest stablecoin in the sector, boasting a market cap of approximately $120 billion.
“At Tether, we maintain regular and direct communication with law enforcement to prevent the misuse of USDt by rogue nations, criminals, and terrorists. We would be aware if we were under investigation, as the article inaccurately suggested. Therefore, we can categorically state that the claims made in the article are entirely false,” asserted Tether CEO Paolo Ardoino stated.
Read more: A Comprehensive Guide to the Top Stablecoins for 2024
The report triggered a bearish trend in the market, stalling Bitcoin’s efforts to surpass $70,000, a threshold it hadn’t reached in three months. Data from BeInCrypto indicated a sharp drop in Bitcoin’s price, reaching a daily low of $66,500 before making a slight recovery to around $66,932 at the time of reporting.
Other prominent digital assets also faced declines, with Solana, Ethereum, Avalanche, and Binance’s BNB each experiencing losses exceeding 4%.
Simultaneously, investor confidence waned further as escalating tensions in the Middle East negatively influenced risk sentiment. Israel reported direct strikes against Iran in retaliation for a recent missile attack, raising concerns that the ongoing conflicts could escalate into a wider regional crisis.
These combined factors resulted in daily liquidations reaching around $380 million, with long traders betting on price increases bearing the brunt of the losses. Long traders accumulated losses of $310 million, while short traders recorded losses of $68.19 million.
Read more: Bitcoin Price Forecast for 2024/2025/2030
Coinglass data reveals that altcoins bore the brunt of the impact, with liquidations surpassing $90 million. Bitcoin and Ethereum followed, suffering liquidations of $65 million and $58 million, respectively.
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