Macro FUD hits crypto again – Leverage flush or a deeper correction ahead?

September could not have started on a more volatile note.

The big question now is whether this volatility is a sign of broader macro stress. According to AMBCrypto, that will be key to crypto’s direction heading into Q4. The total crypto market cap has been stuck in a tight range for almost two weeks, meaning any sharp move could quickly turn into a larger breakout or breakdown. This makes the source of the current volatility especially important for this cycle.

In a post on Truth Social, U.S. President Donald Trump said that the U.S. was striking Iranian targets in and around the Strait of Hormuz and warned Iran not to retaliate. Brent crude is now nearing $95 a barrel, re-introducing geopolitical and inflation FUD into focus. And while this is not the first time that President Trump has issued a warning of an attack on Iran, the timing is important.

From a technical perspective, September was already shaping up to be crypto’s weakest month.

According to CoinGlass, Bitcoin [BTC] has averaged a -3% ROI in September, which has made it the most bearish month for the asset. In addition, the market was already bracing for the upcoming FOMC meeting on the 15th of September. However, with macro FUD cooling and crypto ending August on a strong note, there was optimism that September might just break its typical bearish seasonality. But the return of macro FUD has dashed those hopes.