Bitcoin, Ether Under Pressure as Altcoins Reel, Futures Flash Caution: Crypto Daybook Americas
Bitcoin briefly dropped below $100,000 for the first time since June due to high liquidations and changing macroeconomic factors, leading to a significant crypto market sell-off. Bitcoin is now down over 20% from its October peak. More than $1.7 billion in crypto positions were liquidated, with long positions suffering the most. Security concerns were heightened by a $128 million hack on Balancer. The broader crypto market also experienced a bearish trend, with altcoins seeing dramatic declines due to liquidity constraints. Bitcoin fights to maintain its 50-week moving average support level, while the Crypto Fear and Greed Index reflects 'fear.' Potential market catalysts include supportive U.S. legislation and clearer macro sentiment, though the market remains cautious. Technical levels for Bitcoin include key support and resistance points near $99,000 and $107,000. Derivatives and futures markets show reduced leverage and mixed signals, while the altcoin market continues to face downward pressure with privacy coins as an exception.
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Bitcoin and Crypto Sell-Off
By Francisco Rodrigues (All times ET unless indicated otherwise)
Bitcoin (BTC) briefly dipped below $100,000, marking its first drop beneath that threshold since June. This decline sparked a wider cryptocurrency market sell-off, bringing Bitcoin down over 20% from its all-time high of $126,000 in early October. The broader market, tracked via the CoinDesk 20 (CD20) Index, declined 2.6% in 24 hours and more than 27% in the past 30 days.
Liquidations and Market Dynamics
The sell-off accelerated recently, with $1.7 billion in cryptocurrency positions liquidated in the past 24 hours according to CoinGlass. Most of the losses came from long traders. Jasper De Maere, an over-the-counter trader at Wintermute, remarked:
"Since the ~$19B liquidations on 10/10, markets have been cascading lower."
He further noted that the sell-off stems from factors such as a hawkish tone from the U.S. Federal Reserve, broader risk-off sentiment in global markets, and valuation concerns in sectors like the Nasdaq, which dropped ~2%.
Key Support Levels and Liquidity Concerns
Bitcoin is now testing critical technical levels. The 50-week Simple Moving Average (SMA) at $103,000 has historically supported Bitcoin’s long-term recoveries. De Maere also pointed out thin liquidity in "long-tail alts," which intensifies price volatility. Traders are now focused on Bitcoin’s ability to hold above this level to prevent further declines.
Security Woes in Decentralized Finance
The $128 million hack on DeFi platform Balancer this Tuesday has raised fresh concerns about security in the decentralized finance ecosystem, contributing to a more cautious market sentiment. The Crypto Fear and Greed Index has shifted into “fear” territory, reflecting the negative mood among investors. Near-term catalysts, such as U.S. government reopening and supportive legislation, could potentially stabilize prices, but optimism remains muted for now.
Market Movement and Derivatives Positioning
The BTC futures market reflects increased caution, with open interest (OI) dropping to $25.3 billion from $26 billion last week. Implied volatility (IV) is high across all expiries, signaling expectations of increased market movement. Funding rates remain mixed but low (4%-9% annualized), underscoring weak trend commitment. Recent liquidations added to the pressure; $1.7 billion in positions were liquidated, with longs accounting for 76% of the total.
Altcoin Market Under Pressure
Altcoins have struggled in the wake of Bitcoin’s decline. With an average crypto RSI of 38/100, tokens like OKB, SKY, and FLR hit oversold levels as low as 23/100. Privacy coins remain a rare bright spot, with XMR rising 7%, though most altcoins have erased gains from their rallies in July and August. Liquidity issues and leveraged positions have exacerbated losses, leading to sharp downward spikes for many tokens.
Technical Analysis and Key Levels
On the weekly chart, Bitcoin trades below the significant support level near $107,000. A confirmed close below this level would turn it into resistance and potentially reverse the bullish trend. The $102,500 level also represents a critical point, with $124 million in liquidation potential. Traders are closely monitoring whether Bitcoin can reclaim and close above these marks to avoid further breakdowns.
Crypto Equities and Spot ETF Flows
Publicly traded crypto firms and ETFs faced sharp declines:
- Coinbase Global (COIN) closed at $307.32 (-6.99%).
- Galaxy Digital (GLXY) fell 10.64% to close at $31.17.
- Spot BTC ETFs saw daily net outflows of $566.4 million, while ETH ETFs recorded $219.4 million in outflows.
The total BTC holdings now sit at approximately 1.34 million, while ETH holdings stand at 6.67 million.
Global Market Context
The global economic backdrop remains uncertain. Major indices like the S&P 500 (-1.17%) and Nasdaq Composite (-2.04%) posted losses amid valuation concerns. Meanwhile, commodity prices like gold ($3,977.80, +0.44%) and silver ($47.50, +0.44%) saw slight upticks. Japan's easing of crypto regulations and China's suspension of 24% tariffs on U.S. goods could lend some support to risk assets but are unlikely to reverse the broader bearish trend in the short term.