The crypto market faced intense volatility as reports surfaced of a possible investigation into Tether, followed by heightened geopolitical tensions in the Middle East. On October 25, the Wall Street Journal reported that the U.S. Attorney’s Office might be probing Tether over alleged third-party misuse of its platform. This report has created ripples in the market created fear among investors and sparking widespread liquidations.
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Tether Pushes Back, Calling Allegations “Unsubstantiated”
Tether, the issuer of the largest stablecoin USDT with a market cap of around $120 billion, quickly responded to the allegations. CEO Paolo Ardoino dismissed the claims as “reckless” and “unequivocally false.” Tether emphasized that no official investigation has been confirmed, highlighting its ongoing collaboration with law enforcement to prevent misuse of its assets. Ardoino’s statement reassured investors but did little to calm the market’s response, as the allegations spurred significant price shifts.
Bitcoin Pulls Back Amid Crypto Crash
Bitcoin, which had been testing the critical $70,000 level, faced a notable pullback in the wake of these developments, dropping to a low of $66,500 before slightly rebounding. The price swings were mirrored across major cryptocurrencies, including Solana, Ethereum, Avalanche, and Binance’s BNB, all of which experienced losses exceeding 4%. The sell-off underscored investor hesitation as multiple risk factors converged.
Middle East Tensions Mounts
Compounding the regulatory fears, Middle East tensions further weighed on investor confidence. Israel’s direct strikes on Iran in response to a recent missile attack raised concerns over potential regional escalation. The situation heightened risk aversion across global markets, particularly impacting high-risk assets like cryptocurrencies.
According to Coinglass data, these factors led to $380 million in daily liquidations, with long traders bearing $310 million of the losses. Altcoins were hit the hardest, with over $90 million in liquidations, followed by Bitcoin at $65 million and Ethereum at $58 million. This sudden wave of liquidation has created a FOMO in the market and traders are in fear.
With US elections just 10 days away the fluctuations are considered normal events and it may pave the way to the wider rally post elections. What do you think? Tell us.
