From a fundamental standpoint, Bitcoin is showing no signs of the asset overheating, according to Galaxy’s head of research.
Ethereum’s futures open interest hit a new all-time high, but data shows this feat is usually followed by an ETH price crash.
Crypto market capitalization dropped 5% on average as Middle East tensions flared up late Monday, denting growth in risk assets.
A crypto analyst is eyeing Ether’s funding rate rising above 0.015 to see if “the calm before the storm breaks.”
Over the past few days, Bitcoin has seen quite a notable rebound in its price, rising from as low as the $53,000 level last week to trading as high as above $66,000 in the early hours of Wednesday before now retracing to a current trading price of $64,433. This bullish price performance has been the downfall of approximately 50,436 traders in the crypto market today. Particularly, according to data from Coinglass, this number of traders has seen massive liquidations, bringing the current total liquidations to $145.58 million. Bitcoin traders felt the brunt of this total liquidation, seeing roughly $46.22 million shared evenly between short and long positions, indicating the asset’s mixed trajectory in the past day alone. Related Reading: Bitcoin Dominates as Crypto Funds Attract $1.44 Billion in Fresh Capital, Rally To Begin? Bitcoin: Bigger Liquidations Incoming While recent trading activities have triggered millions of dollars in liquidations, further data shows that this scenario could escalate dramatically, turning into billions if Bitcoin continues its ascent towards record highs, breaching a notable mark. Particularly, as reported by MartyParty, a prominent crypto enthusiast in the community, should Bitcoin’s price hit $72,400, the market would feel the impact, with nearly $19 billion in Bitcoin short positions poised for liquidation at this price point. Marty Party reported this on Elon Musk’s social media platform X, citing data from Coinglass. Concluding this disclosure, the crypto enthusiast noted: “Never bet against technology.” How Long For This Liquidation To Occur? While the $72,400 price mark might seem like a long stretch from the current market price, BTC might not take that long to get to this mark, given the current fundamentals. For instance, the market might be drawn quicker to this mark as this is where the liquidity lies to fuel its current trend. Aside from that, no bears are in sight to slow the asset’s rally from getting there in the short term. First of all, the German government has sold off all of its BTC holdings of roughly 49,858 BTC with a current balance below $500, according to data from Arkham Intelligence. Notably, the current balance of approximately $427 worth of BTC is the cumulative sats (small units of BTC) donated from different wallet addresses. Furthermore, according to recent data from CryptoQuant, 36% of Mt. Gox BTC has been distributed to creditors. However, despite this distribution, BTC’s price is yet to see any notable correction, which suggests two things: that the creditors are not selling, and even if they are, the Bitcoin market is absorbing it real quickly as evident in the slight stabilization of BTC’s price. Related Reading: Bitcoin Price On The Rise: Is The $70K Mark Within Reach? These major sell-offs by the German government and Mt. Gox, once considered major threats to the crypto market, now seem to have minimal impact, indicating that no significant bearish obstacles prevent Bitcoin from surging to the $72,400 mark, creating a short squeeze. Featured image created with DALL-E, Chart from TradingView
Bitcoin’s OI jumped $2.02 billion over three days, sparking concerns among traders about a potential “whipsaw” event.
The Bitcoin funding rate and 3-month annualized basis rates are moving to levels that signal to traders it may just be the “calm before the storm.”
Even a small 2.25% decline this weekend could trigger the liquidation of over $500 million in Ether long positions.
One crypto analyst says Bitcoin’s just undergone one of the “healthiest market resets” he has seen in a long time.
10x Research attributed the large liquidations to some traders anticipating a price correction, while others have fear of missing out (FOMO) that Bitcoin will keep rallying.