Why are BTC, ETH, XRP and SOL in the red today?

Bitcoin, Ethereum, XRP, and Solana have fallen between 4.3% and 6.3% over the past 24 hours on Oct. 7, as the broader crypto market cap dropped 3.8% to $2.925 trillion.

CoinGecko data showed Bitcoin trading at $82,855.50, down 4.3%, while Ethereum fell 5.8% to $2,564.48 in the individual asset pages checked for this report. XRP lost 6.3% to $1.42, and Solana declined 4.9% to $115.80.

Across other major tokens, the tracker recorded losses of 8.5% for Cardano and 8.2% for Dogecoin. BNB slipped 2.5%, Chainlink and Hyperliquid each fell 5.2%, and TRON declined 0.3%, according to their CoinGecko pages.

Using the main page’s rounded capitalization and percentage change, the market was worth approximately $3.041 trillion a day earlier. The estimated $115.5 billion reduction measures the change in token valuations rather than an equivalent amount of cash withdrawn by investors.

Forced long closures have accelerated BTC and ETH losses

CoinGlass data cited in an Oct. 7 report on the crypto market’s liquidation wave put total forced position closures at approximately $554.8 million over 24 hours, including $487 million in longs. Within one hour, the same report recorded $403.58 million in long liquidations, representing 97% of the $415.33 million total.

In comments shared with crypto.news, Dan Khus, chief analyst at LVRG Research, attributed the dip to crowded bets on rising prices being forced out. He described the episode as a leverage flush rather than the start of a downward trend.

“The dip in crypto prices serves as a leverage flush instead of a downward trend, stemming from crowded bets on higher prices being forced out, with most of the liquidations coming from long positions.”

According to the liquidation report, falling prices forced exchanges to close bullish leveraged positions, adding sell orders during the decline. Its CoinGlass snapshot put the one-hour liquidations at about 0.27% of total open interest, leaving substantial derivatives exposure after the initial drop.

Ether positions accounted for roughly $174 million of a separate $547 million liquidation, as per reports. Futures trading volume rose 16% to $182.85 billion while open interest slipped just 1% to $152.60 billion.

Tanker attacks and oil prices have added selling pressure

CoinDesk linked Bitcoin’s fall below $84,000 to stepped-up Iranian attacks on tankers in the Strait of Hormuz, with Brent crude moving above $101 a barrel as Treasury yields and the dollar rose.

In an Oct. 5 dispatch, Reuters reported that shipping intelligence service Marisks had counted at least seven tanker incidents during the preceding week. Marisks said the Kazimah III was struck on Oct. 1 and the Lipsi on Oct. 4; crews on both ships were reported safe.

The same dispatch placed the Strait of Hormuz’s pre-war share at about 20% of global crude and liquefied natural gas supply. Reuters also reported that Gulf crude exports had exceeded pre-war levels on 14 days in September, despite continued shipping risks.

Wednesday’s early market coverage cited Reuters figures placing the 10-year U.S. Treasury yield at 5.307% and the dollar index at 102.07, up 0.16%. The report also noted preparations for a $39 billion auction of 10-year Treasury securities.

For American Bitcoin investors, HashKey Group senior researcher Tim Sun had already identified long-term yields, U.S. spot ETF flows and derivatives leverage as the main factors to follow. In Sep. 29 coverage of another Fed hike’s risks, Sun said higher long-term rates and tighter dollar liquidity could weaken Bitcoin demand.

Fed minutes have put another rate increase in focus

Khus said traders were watching Wednesday’s Federal Reserve meeting minutes for indications that policymakers still wanted another increase this year. He also identified next week’s inflation reading and Bitcoin’s ability to hold the mid-$80,000 area as tests for whether forced selling would resume.

The Federal Reserve’s September statement raised its target range by 25 basis points to 3.75%–4.00%. As covered on Sep. 16 in the report on the unanimous Fed rate increase, all 12 voting members supported the first hike since July 2023.

The September coverage also recorded 16 of 18 policymakers projecting at least one additional quarter-point increase before year-end. According to that report, Goldman Sachs Asset Management’s Kay Haigh regarded December as the base case for another increase, with inflation readings and energy prices influencing the decision.

By Oct. 1, coverage of Jefferson’s rate hike comments cited Polymarket odds of 23% for an October increase, compared with about 70% a week earlier. The same report said Goldman Sachs had moved its forecast for the next increase to December.

In his Oct. 1 speech, Fed Vice Chair Philip Jefferson said future policy changes should depend on economic data, the outlook and the balance of risks. He supported September’s increase but said officials might need more time to reach their next judgment, while identifying geopolitical developments and stronger demand as upside risks to inflation.

Four Hyperliquid wallets opened shorts before Bitcoin fell

Lookonchain’s Oct. 7 monitoring, reproduced by ICOBench, identified four newly created wallets depositing a combined $1 million in USDC into Hyperliquid before opening Bitcoin shorts listed at 40x leverage. The positions totaled 148.49 BTC, worth approximately $12.5 million, according to the blockchain tracker.

ICOBench’s review placed the short entries between $85,475 and $85,577 and reported approximately $235,000 in unrealized profits with Bitcoin near $83,942 at its snapshot. The publication said the available records did not show the wallets’ complete margin arrangements, other positions, or hedges.