Key facts
- Bitcoin traded below $81,000 and Ethereum near $2,400 on Thursday.
- Nearly $1 billion in crypto long positions were liquidated over the past 24 hours.
- Bitcoin ETFs saw $244 million in net outflows on Thursday.
- Ethereum ETFs experienced $72 million in outflows on Thursday.
- A government wallet moved $1.01 billion in Bitcoin from the Bitfinex hack seizure.
- Vitalik Buterin warned about AI's potential to break encryption and suggested hash-based cryptography.
Cryptocurrencies experienced a sharp selloff on Thursday, with Bitcoin dipping below $81,000 and Ethereum falling close to $2,400, impacting the broader market. This downturn led to nearly $1 billion in crypto long positions being liquidated over the preceding 24 hours, with Ethereum longs being particularly hard hit. The decline in major cryptocurrencies was exacerbated by significant outflows from Bitcoin and Ethereum Exchange-Traded Funds (ETFs). Bitcoin ETFs saw $244 million in net outflows on Thursday, following $484.9 million in outflows on Wednesday, pushing the monthly total for October into negative territory at minus $400 million. Ethereum ETFs also experienced $72 million in outflows, contributing to an eight-session streak of outflows totaling $640 million.
Several factors contributed to the selloff. Tom Lee of Bitmine indicated a potential reduction in buying of Ethereum once they acquire 5% of the supply. Funding rates on Ethereum flipped negative midweek for the first time in months, suggesting increased bearish sentiment among traders. Additionally, rising oil prices due to attacks on Iranian tankers may have prompted a shift away from riskier assets. An Ethereum researcher's warning about preparing for "Bunker Mode" also contributed to market jitters.
However, major cryptocurrencies have shown signs of recovery in the past 12 hours. Bitcoin has climbed back above $82,000, and Ethereum is nearing $2,500. Despite the recent volatility, the fundamental bullish case for crypto, including ongoing debasement trades, institutional adoption, and tokenization acceleration, remains intact. Analysts suggest this correction may be a healthy flush of leverage before the market continues its upward trend. The selloff also occurred a day before the anniversary of a significant market downturn on October 10th of the previous year.