The cryptocurrency market faced harsh selling pressure on Thursday. After falling to around $61,300 in the morning, Bitcoin recovered to $64,680 and then traded around $62,500 again. While Ether fell to $1,750, the loss in some altcoins such as NEAR, ZEC and JUP exceeded 13 percent.
Liquidations and futures dissolution
The pullback in price triggered massive liquidations in the futures market. The total of compulsorily closed positions in the last 24 hours reached 1.7 billion dollars. Of this, $750 million came from bitcoin and $390 million came from ether. The total liquidation amount in the last two days reached approximately 3 billion dollars.
Futures data indicated that existing transactions were closed rather than new leveraged positions entering the market.
Total 24-hour futures trading volume increased by 2.9 percent to $305 billion. On the other hand, open position size decreased by 8.5 percent to 111.4 billion dollars. This chart showed that trading activity remained high, but position reduction was more prominent than new risk taking.
Common appearance in Bitcoin, ether and XRP
The amount of open interest in Bitcoin decreased to 766,000 BTC from the peak of over 800,000 BTC seen the day before. The data suggest that the sharp decline cleared a significant portion of leveraged long positions, while new bearish transactions did not accumulate very strongly on the bitcoin side. It was reported that the same trend is also valid for ether and XRP.
Mini dictionary: Open position refers to the total amount of contracts that have not yet been closed in the futures market. If the price is falling while this data is rising, new short transactions are entering the market; If the price declines while falling, it is considered that existing leveraged positions may be unwinding.
The general outlook in derivative markets also indicated a weak course. The fact that the 24-hour cumulative volume difference for the top 20 tokens remained in the negative zone showed that investors were mainly selling at market price. In addition, Volmex’s 30-day implied volatility indices for bitcoin and ether have seen significant increases over the past three sessions.
The strengthening demand for downside protection in the options market revealed that investors were more cautious against new price fluctuations.
Divergence in Solana and some altcoins
The main asset that differentiated from the overall market was Solana. Although the price of SOL decreased, the amount of open interest reached a record level with 72.16 million tokens. This situation was considered as a development indicating that the accumulation of short positions in the market has increased. Similarly, in TRX and ADA, it was seen that open positions increased while the price decreased.
The altcoin market has performed poorly compared to major cryptocurrencies. HYPE lost 12 percent of its value after its peak this week. DASH, ENA and FET have also fallen by more than 10 percent since the beginning of the day. Due to lower market depth, even limited capital movements in altcoin pairs can affect prices more harshly.
60 thousand dollars level is being watched
There is an open position of over $1 billion in put contracts with a strike price of $60,000 in the options market. It is stated that as the spot price approaches this level, large position adjustments may increase and this may increase volatility. The most heavily traded option contract in the last 24 hours was the put contract with a strike price of $55,000.
The next direction of the market may determine whether bitcoin can stay above $60,000. If it falls below this level, it can be expected that new liquidations will come to the fore and the selling pressure will increase, especially in low-liquid altcoins. On the other hand, although Monero decreased by 4 percent during the day, it managed to remain positive in the 24-hour view and was traded at $ 347.
