Iran vs Israel: Cause of $860 Million Sell-Off

The recent cryptocurrency market liquidation, occurring on Friday, was largely attributed to escalating concerns over a potential conflict between Iran and Israel, according to analysts at QCP Capital.

Lower-than-usual funding rates, along with geopolitical tension that typically drives investors away from riskier assets towards investments deemed more stable, contributed to the cryptocurrency value decline. Over the past 24 hours, more than 260 thousand traders experienced losses, with the total value of liquidated assets reaching an impressive $860.82 million, as the overall cryptocurrency market capitalization dropped by nearly 5%.

QCP Capital also noted the significant role played by the Ethereum (ETH) risk reversal indicator.

The negative sentiment in the market was evident, and it also reflected in the funding rates in the perpetual swap market. These rates plummeted to over -40%, signaling a strong bearish sentiment and deep concerns in the market.

Overall, concerns related to the Iran-Israel conflict and negative funding rates led to a sharp market reaction in the cryptocurrency market, underscoring the market's sensitivity to geopolitical events and changes in investor sentiment.