The bitcoin exchange rate has once again demonstrated its unpredictability, making a sharp jump up and an equally rapid drop in just 24 hours. On the evening of October 21, against the background of the opening of the American trading session, the value of the first cryptocurrency jumped from $108,300 to $113,900, updating the weekly maximum. However, on the morning of October 22, the exchange rate returned to its initial value of about $108,300.
The reason for the volatility could be the statement by former US President Donald Trump about the possible disruption of the meeting with Chinese President Xi Jinping. This caused fears in the markets and provoked profit-taking by traders, which led to a decline in quotations.
Ethereum (ETH), as expected, followed bitcoin: its price initially reached $4,100, but by the morning it had rolled back to $3,800. This was also the highest for the week, but it did not hold due to the general market correction.
The total volume of the cryptocurrency market also sank by 0.17%, reaching $3.65 trillion. Most of the major altcoins recorded a decline. The Mantle token (MNT) has fallen in price especially noticeably — minus 8%, while Zcash (ZEC), on the contrary, has increased by 9%.
According to Coinglass, over 160,000 traders' positions worth over $652 million were liquidated during the day. Of these, $354 million accounted for forcibly closed long-term loans, that is, growth-oriented transactions. The remaining $298 million is for short positions (shorts).
The emotional background exerted additional pressure on the market: the fear and greed index dropped from 34 to 25 points, moving into the zone of "extreme fear". This means that investors are prone to panic actions and prefer to get rid of digital assets without waiting for growth.
Nevertheless, interest in crypto funds remains. By the end of October 21, $477 million of investments were received in American ETFs for bitcoin, and $141 million in similar funds for Ethereum. This may indicate short-term speculative activity against a background of high volatility.
Thus, the current behavior of the market demonstrates its sensitivity to political news and emotional perception of risks on the part of investors. Periods of high volatility will persist until global geopolitical and macroeconomic trends become clearer.
