Crypto market falls: Bitcoin fell 4.2%, US$651 million long positions were cleared

Capital outflows, strong tide and interest rate hike expectations: Three major factors have dragged down the crypto market

Capital outflows from Bitcoin and Ethereum U.S. Spot ETFs, forced liquidation of long positions of more than US$651 million, and central bank meeting minutes suggesting further interest rate hikes: These three known reasons have continued to depress prices in the cryptocurrency market since Tuesday. On the afternoon of Tuesday, October 6, 2026, Bitcoin fell from a high of $86,592 to $82,952, a drop of 4.2% in 24 hours. Ethereum fell 6.3% from high to low on Wednesday night, and XRP fell 7.1%, based on hourly prices from CoinGecko.

Market conditions had not changed significantly until early Thursday morning. Bitcoin was at $83,401, down 2.4% from 24 hours ago; Ethereum was at $2,582 (down 4.1%);XRP was at $1.43 (down 4.6%); and Solana was at $116.63 (down 3.1%). But this is not a crash: Bitcoin has fallen only 0.25% in seven days, and the price has retreated to last week's levels. According to CoinGecko data, the total market value of all cryptocurrencies is US$2.85 trillion.

The crypto market generally fell: Eight of the top ten unstable currencies fell

The decline was widespread. As of early Thursday morning, eight of the top ten non-stablecoin cryptocurrencies had fallen in the past 24 hours. The biggest declines were XRP (4.6%), Dogecoin (4.5%) and Ethereum (4.1%), followed by Hyperliquid (3.7%) and Solana (3.1%). Bitcoin and Zcash each fell 2.4%. Only BNB fell slightly by 0.5%, while Tron and Monero rose slightly.

Ethereum's decline is almost twice that of Bitcoin, which is why we can best measure: ETF outflows and forced liquidations. For the performance of individual currencies on Wednesday, refer to our analysis of Cardano after the end of the Leios rally and Dogecoin's analysis of falling below 9 cents.

Reason 1: U.S. ETF funds continue to flow out, and Ethereum has had net outflows for seven consecutive trading days.

U.S. exchange-traded spot funds are the largest compliance channel for institutional investors to enter Bitcoin and Ethereum. Therefore, their daily capital inflows and outflows are regarded as indicators of market sentiment. According to Farside Investors, on Tuesday, October 6, the Bitcoin ETF still absorbed $118.8 million, almost all of which flowed into BlackRock's iShares Bitcoin Trust Fund. However, on Wednesday, the situation reversed: the remaining funds reported a combined outflow of $277.2 million, including $105.1 million from the Fidelity Bitcoin Fund and $101.7 million from funds jointly managed by Ark and 21Shares. As of Thursday morning, the iShares Fund's data had not been updated, and the Bitcoin ETF overview on CoinGlass showed the same daily totals.

The trend for Ethereum is longer and more obvious. Since September 29, the Ethereum ETF has reported net outflows on every trading day, and Wednesday was the seventh consecutive day. On Tuesday alone, investors withdrew $201.9 million from the iShares Ethereum Trust, and another $44.8 million flowed out of smaller funds on Wednesday (excluding data from two BlackRock funds). As shown in the Ethereum ETF overview on CoinGlass, cumulative outflows over the seven trading days were at least US$452.7 million. Regarding the impact of continued capital outflows on the price of Ethereum, we explained in Wednesday's analysis of continuous outflows on the sixth day.

Reason 2: US$651 million of long positions were forcibly closed

The second wave of pressure came from the futures market. According to CoinGlass, in the 24 hours ended Thursday morning, positions worth $713.2 million were forcibly closed, of which $651.2 million were long positions, positions betting on price increases, accounting for up to 91%. The strike affected 123,822 traders, with the largest single position on the Binance platform, with an Ethereum long position worth US$26.6 million.

The distribution is striking: Ethereum's long positions have a strong value of $236.8 million, compared with $173.9 million for Bitcoin, although the Bitcoin market is much larger than Ethereum. Solana and XRP followed closely, with about $20 million each. This is consistent with price movements, with Ethereum falling almost twice as much as Bitcoin. The mechanism behind it remains the same: as prices fall, the collateral behind leveraged long positions no longer sufficient, and exchanges force the sale of the positions. This sell-off further lowers prices and triggers a chain reaction of the next level of positions. During the process, the total value of open interest (Open Interest) fell only 1.5% to $152 billion. As a result, most leveraged positions remain in the market.

Reason 3: The Federal Reserve sends a signal to raise interest rates further

At 8 pm German time on Wednesday, the U.S. Central Bank released the minutes of the September 15 and 16 meetings. At that meeting, the Federal Open Market Committee, chaired by Kevin Walsh, unanimously raised the policy rate by 0.25 percentage points to a range of 3.75% to 4.00%. The minutes showed that the move was not the end: most participants believed that a step forward in raising interest rates at the end of the year might be appropriate. Several members described the policy rate as "non-restrictive" or "only slightly restrictive", meaning that in their view the rate would have little dampening effect on the economy.

Higher interest rates increase the cost of credit and make interest-bearing investments more attractive, posing headwinds on risky assets such as cryptocurrencies. However, timing does not prove that the minutes of the meeting were the direct cause of the pullback: Bitcoin reached a low three hours before its release. In comparison, Ethereum's lowest current price at the time of launch was $2,550, and XRP continued to fall on Wednesday night. According to the Fed's meeting calendar, the next interest rate decision will be made on October 28. Prior to this, the U.S. Department of Labor will release the September consumer price index on October 14.

Bitcoin is leaving the exchange, but the price is still falling

One signal that may at first glance seem to contradict the downward trend: From September 20 to October 5, Bitcoin holdings on Binanping fell by 41,700 to approximately 663,100, according to data from data analysis firm CryptoQuant. It is generally interpreted that the fewer coins there are on the exchange, the less supply there will be for short-term sell-off. But that did not support prices this week. The slow decline in exchange balances over two weeks is a slow variable, while strong and peaceful ETF outflows occur immediately. Why the reserve data conveys less information than its apparent promise, please refer to our analysis "41,700 bitcoins left Binance in more than two weeks". If you move coins outside of the exchange after purchase, there are suitable device recommendations in the Hardware Wallet Comparison Guide.

What it means for German investors

A 4% to 7% drop in two days is not an unusual event in the crypto market. The key is how to respond. Before selling or buying more, it is recommended to check the following four points:

杠杆与强平：如果您使用杠杆交易，首先要清楚您的强平价格，并计算其与当前价格的百分比距离。在十倍杠杆下，约10%的反向波动就会耗尽全部抵押品；在二十倍杠杆下，约5%的波动即可触发强平。由于维持保证金的存在，交易所通常会更早地关闭仓位。因此，比特币4.2%的跌幅已将二十倍杠杆的多头仓位推向强平边缘甚至超出。6.51亿美元的强平多头仓位表明，许多交易者将这一距离设置得过于狭窄。

分批买入而非凭直觉：回调诱惑您一次性投入全部金额，因为价格看起来便宜。但没人知道低点是否已经出现。如果希望加仓，最好将金额分为三到四部分，并按固定间隔（例如每周）投资。这样可以分散入场价格，进一步的下跌只会影响部分资金。哪些提供商受欧洲监管，请参阅受监管加密交易所的比较。

关注关键价位而非盲目对冲：This week's lows are support levels worth watching, with Bitcoin at around $82,950, Ethereum at around $2,550, and XRP at around $1.41. If prices remain above these positions, it means that this is a normal correction. A break below these levels is a reason to review the position, but it is not an automatic sell signal. Stop losses placed directly at these levels can easily be triggered by brief spikes without changing fundamentals. For how prices are likely to develop in the medium term, see our forecasts for Bitcoin, Ethereum and XRP.

Check holding period before selling: If you want to sell, please confirm the purchase date first. Prior to the promulgation of the new law, the one-year holding period stipulated in Article 23 of the German Income Tax Act still applies: income from coins held for more than one year is exempt from tax, while sales during the holding period are subject to tax. Losses from such sales can offset gains from other private disposals. The Federal Ministry of Finance's draft of September 30, 2026 plans to eliminate the holding period requirement starting from January 1, 2027, and the Cabinet will vote on this on October 14. According to the draft, more shares purchased this year will still retain a one-year holding period. See our article "Crypto Holding Period before Cabinet" for criticisms of the draft from tax advisers and associations. Please see Comparison of Crypto Tax Tools for Software for Profit and Loss Accounting across Multiple Exchanges.

Crypto market after correction: Key dates until the end of October

• October 14: U.S. September consumer price data release and cabinet vote on crypto holding period. The Cabinet resolution has not yet become law.
• October 28: Federal Reserve interest rate decision. Given Wednesday's meeting minutes, most committee members believed it might be appropriate to move forward in raising interest rates at the end of the year.
• Each trading day: ETF fund flow. If the Ethereum ETF turns into a net inflow after seven consecutive days of outflows, then one of the three reasons for the decline no longer exists.
• Before each leveraged trade: Check the distance to the strong flat price. The total value of open interest remains at $152 billion, which means leveraged funds are still in the market.

(As of October 8, 2026. This article does not constitute investment advice. Price and fee structures are subject to change; please check terms with your provider before purchasing.)