Bitcoin’s price became troubled on Friday as the # 1 cryptocurrency by market capitalization posted its worst weekly performance since March 2020, when the pandemic hit the global economy.
- Bitcoin (BTC) is trading at around $ 46,244 as of 9:00 PM UTC (4:00 PM ET). 5.7% less than in the last 24 hours.
- Bitcoin 24-hour range: $ 44,180.99 – $ 49,325.91 (CoinDesk 20)
- BTC is trading below its 10-hour and 50-hour averages on the hourly chart, a bearish signal for market technicians.
Bitcoin trading on Coinbase.
A quick recap of Bitcoin’s most turbulent weekly performance for almost a year shows that this week’s high volatility was not caused by a simple factor. The correction earlier this week was largely triggered by an overheated derivatives market as traders rushed to exit leveraged bets (or liquidated from positions) that had accumulated as Bitcoin was pushed to an all-time high of over $ 58,000. A dip below $ 45,000 on Thursday coincided with a sell-off in the broader stock market as concerns increased over rising bond yields, which could lessen the appeal of riskier assets like cryptocurrencies.
Bitcoin’s spot market looked calm on Friday. The daily trading volume on eight crypto exchanges recorded by CoinDesk remained largely unchanged compared to the level on Thursday. Volume spiked during the sell-off earlier this week after large Bitcoin inflows on exchanges like Gemini on Sunday, signaling the intent of some traders to take profits as prices neared $ 60,000.
The relatively calm tone of the market on Friday appeared to reflect minor concerns about an important end-of-month expiration date in options contracts. On Friday, fictitious Bitcoin options contracts valued at around $ 3 billion expired and the strike price with the highest open positions was $ 48,000, according to derivatives data website Skew.
“Typically, the highest strike price for options continues to affect the underlying asset’s spot price, which may explain some of the recent Bitcoin price movements,” said Hunain Naseer, senior editor at OKEx Insights. “Now that these options contracts are out of the way, the market seems free to choose a direction in the short term.”
“Despite the narrative being sold by crypto maximalists that digital assets are a safe haven, the use of Bitcoin suggests that it is more of an object of risk,” said Denis Vinokourov, head of research at Bequant.
“For example, liquidity events like those seen in the stock markets this week will feed into digital assets later, even if the two are fundamentally unrelated,” Vinokourov said. “In times of need, cash is king, not Bitcoin.”
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Others have remained bullish after this week’s high volatility.
“Currently, one of the most interesting aspects of Bitcoin is that there is no basis on which a valuation model can be based, but its price movements correlate with the social mood,” said Guy Hirsch, US managing director at the trading platform eToro. “Changes in social sentiment can be indicators of price movements and inform investors of short-term movements.”
“In the long term, however, we consider it a ‘safe haven’ in the sense that there is no way to artificially dump it or otherwise manipulate it, and that’s a good reason for people to invest in it,” he said Hirsch said.
Recent blockchain data showed that more investors were accumulating bitcoin, according to CryptoQuant, a data provider, which is reflected in a huge bitcoin outflow from the institution-driven crypto exchange Coinbase Pro.
Ether moves along with Bitcoin in a calm market
Ether (ETH), the second largest cryptocurrency by market capitalization, was down on Friday, trading at around $ 1,446.2 within 24 hours at 2144 UTC (4:00 p.m. ET).
Ether fell to nearly $ 1,400 during Friday’s trading hours in Asia, and hovered around $ 1,450 for most of Friday.
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Ether’s spot trading activity was low on Friday and continued to mirror the Bitcoin market.
After the correlation between the two cryptocurrencies decreased slightly last month, the relationship between Bitcoin and Ether prices became stronger in late February.
Digital assets on CoinDesk 20 are mostly red on Friday. As of 9:00 PM UTC (4:00 PM ET), there were no notable winners.
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- The oil was down 3.02%. Price per barrel of West Texas Intermediate Crude: $ 61.61.
- Gold was in the red at 2.23% and at press time at $ 1,730.40.
- The US 10-year Treasury yield fell to 1.402% on Friday.
The CoinDesk 20: The assets that matter most to the market