Bitcoin fell below $83,000 in Asian trading on 29 September, triggering the liquidation of roughly $500m (£371m) in leveraged cryptocurrency positions and affecting 129,197 traders.
The sell-off was driven by wider financial markets rather than crypto-specific news, after movements in oil, government bonds and gold increased pressure on riskier assets.
The chain reaction began on Monday, 28 September, when President Donald Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz. Brent crude subsequently rose 3.2% to move back above $100 a barrel.
Higher oil prices can raise concerns about persistent inflation. Traders responded by increasing their expectations of an October Federal Reserve rate hike, with the CME Fedwatch tool showing a 70.3% probability, compared with 64.2% the previous day, according to a USA GOLD market report.
The yield on 10-year US Treasury bonds climbed above 5.2%, while the 30-year yield rose beyond 5.3%. Higher yields also weighed on precious metals, with gold falling 3.4% in a single day.
The Kobeissi Letter described the decline as “one of the rarest single-day declines of the last two decades”. Since 2006, gold’s average daily movement has been +0.05%, with a standard deviation of 1.19%. Monday’s fall was about 2.9 standard deviations below that normal range.
Spot gold dropped to $4,148.69 an ounce, its lowest price since 5 August, while silver fell 4.31% to $61.53. Bitcoin.com News had reported that gold and silver lost $550bn in value within hours as bitcoin fell to $82,780, although the broader decline continued.
Bitcoin entered the latest session after recording its best weekly close since January. Spot bitcoin exchange-traded funds attracted $2.39bn last week, their strongest weekly inflow since October last year.
That combination had helped create a market with high optimism and substantial leverage. Bitcoin later recovered from its fall below $83,000 to trade near $83,250, having reached a seven-day low of $82,500 and subsequently rebounding towards $84,000.
Several alternative cryptocurrencies suffered sharper losses. QNT, ONDO and NEAR each fell between 13% and 20% as the liquidations spread across the market.
Derivatives data showed bitcoin futures open interest – the total value of outstanding contracts – had declined to 650,000 BTC, its lowest level since March. Funding rates also turned negative across major exchanges, with short positions accounting for 53.1% of taker volume.
However, some investors appeared to be moving bitcoin away from exchanges rather than closing their exposure. Binance recorded an outflow of 13,800 BTC in a single day, potentially indicating transfers into long-term cold storage.
