Key Points
- Bitcoin and Ethereum face significant market pressure due to upcoming options expiry and recent market decline.
- Market panic has led to over $637 million in liquidations across the cryptocurrency market.
The cryptocurrency market is currently experiencing a downturn, with Bitcoin dropping to $53,400, a value last seen in February. This significant decline over the past two days has reduced its global market capitalization by over 13%, equating to a loss exceeding $250 billion.
The imminent expiry of Bitcoin and Ethereum options contracts could exacerbate this already precarious situation.
Bitcoin and Ethereum Under Pressure
Bitcoin has recently fallen below the crucial $55,000 support level. If it doesn’t bounce back, it could potentially fall further towards the $52,000 support level.
The market is also preparing for the expiration of over 18,300 Bitcoin options on Deribit, valued at $1 billion. The put-call ratio is 0.65, and the max pain point has decreased from $63,500 to $61,500. This ratio is indicative of market sentiment, with a ratio below 1 suggesting more call options than put options.
Recent data shows that the 24-hour put volume reached 19,552, compared to a 24-hour call volume of 22,088. This resulted in the put-call ratio reaching 0.88 in the last 24 hours.
Ethereum is also under significant selling pressure, trading around the $2,830 zone. Additionally, 163,170 Ethereum options worth $472 million are set to expire. The put-call ratio for these options is 0.35, and the max pain price is $3,350. In the past 24 hours, the put volume for Ethereum has increased to 98,643, while the call volume is at 126,788, resulting in a 0.78 put-call ratio.
Market Panic and Liquidations
Data from CoinGlass reveals that the current market panic has led to over $637 million in liquidations across the cryptocurrency market. This includes $540 million in long positions and $97 million in short positions. Major altcoins like SOL, DOGE, BNB, XRP, PEPE, PEOPLE, and NOT have also experienced significant liquidations.
The decline is reportedly due to the former leading exchange Mt. Gox repaying $10 billion in Bitcoin and BCH. According to Arkham, Mt. Gox transferred 47,229 Bitcoin today, worth approximately $2.97 billion.
Prominent financial analyst Jacob King noted the on-chain data, which shows a large selling volume from these wallets. He anticipates that the majority of the $8.2 billion in Bitcoin set to be distributed back to creditors will be sold off. Jacob cautioned his followers about the potential of an upcoming bear market, stating that based on the current low demand volume, this could easily push Bitcoin back into a severe bear market.
