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Bitcoin Greed No More: Sentiment Back At Neutral After $57,000 Plunge

Data shows that Bitcoin sentiment has cooled off to neutral from greed following the asset’s latest plunge to the $57,000 level.

Bitcoin Fear & Greed Index Has Returned To Neutral Levels

The “Fear & Greed Index” is an indicator created by Alternative that shows the average sentiment among investors in the Bitcoin and wider cryptocurrency market.

This index estimates sentiment by considering five factors: volatility, trading volume, social media data, market cap dominance, and Google Trends.

The metric uses a scale that runs from zero to 100 to represent this average sentiment. All values under 46 suggest that investors are fearful, while those above 54 imply a greedy market. The zone between these two cutoffs naturally corresponds to the territory of neutral mentality.

Now, here is what the Bitcoin sentiment looks like right now, according to the Fear & Greed Index:

Bitcoin Fear & Greed Index

As displayed above, the Bitcoin Fear & Greed Index is at a value of 54, implying that investors share a neutral sentiment currently. However, the neutrality is only just, as the metric is right at the boundary of the greed region.

This is a significant departure from yesterday’s sentiment: 67. The chart below shows how the indicator’s value has changed recently.

Bitcoin Neutral

As the graph shows, the Bitcoin Fear & Greed Index has been declining recently. For most of February and March, as well as the first half of April, the indicator was in or near a special zone called extreme greed.

The market assumes this sentiment at values above 75. As the asset price struggled recently, the mentality cooled off from this extreme zone and entered the normal greed region. With the latest crash in BTC, the index has seen a sharp plunge, now exiting out of greed altogether.

Historically, cryptocurrency has tended to move against the majority’s expectations. The stronger this expectation, the higher the probability of such a contrary move.

This expectation is considered the strongest in extreme sentiment zones, as well as extreme fear and greed. As such, major bottoms and tops have often occurred in these territories.

The all-time high (ATH) price last month, which continues to be the top of the rally so far, also occurred alongside extreme values of the Bitcoin Fear & Greed Index.

With the sentiment now cooled to neutral, some investors may be watching for a fall into fear. This is natural because a rebound would become more probable the worse the sentiment gets now.

BTC Price

During Bitcoin’s latest plunge, its price briefly slipped below $57,000 before surging back to $57,300.

Bitcoin Price Chart

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Bitcoin Supply In Loss Hits 10% After Crash: What Happened Last Time

On-chain data shows the Bitcoin supply in profit has plunged following the latest crash in the asset’s price towards the $65,000 level.

Bitcoin Supply In Profit Is Now Down To Around 90%

As analyst James Van Straten pointed out in a post on X, around 10% of the BTC supply is now in a state of loss. The on-chain indicator of interest here is the “Percent Supply in Profit,” which tracks the percentage of the total circulating Bitcoin supply holding an unrealized gain.

This metric works by going through the blockchain history of each coin in circulation to see the price at which it was last transferred. Assuming that this previous transaction involved a change of hands, the price at its moment would serve as the cost basis for the coin.

The coins with a cost basis that is less than the current spot price of the cryptocurrency would naturally be considered to be holding a profit, and as such, they would be counted under the supply in profit.

The Percent Supply in Profit adds up all such coins and calculates what part of the total supply they make up for. The opposite metric, the Percent Supply in Loss, adds up the coins not satisfying this condition.

Since the total circulating supply must add up to 100%, the Percent Supply in Loss can be deduced from the Percent Supply in Profit by subtracting its value from 100.

Now, here is a chart that shows the trend in the Percent Supply in Profit for Bitcoin over the last few months:

Bitcoin Supply in Profit

As displayed in the above graph, the Bitcoin Percent Supply in Profit has seen a sharp drop recently as the cryptocurrency price has gone through a significant drawdown.

The indicator’s value has dropped to around the 90% mark, which means that about 10% of the supply is currently carrying a loss. The chart shows that the last time the metric touched these levels was back on 22 March. Interestingly, the asset also found its bottom around then.

Earlier, the Percent Supply In Profit had pushed towards the 100% mark, which was a natural consequence of the price setting a new all-time high (ATH), since at fresh highs, all of the supply must be out of the red.

Generally, the investors in profit are more likely to sell their coins, so if many come into gains, the possibility of a mass selloff rises. Due to this reason, high levels of the Percent Supply In Profit have often led to tops.

Similarly, bottoms become more likely when investor profitability levels drop relatively low. The current value of 90% is still quite high, but this isn’t unusual during bull runs, as there is strong demand and ATHs are being explored.

The fact that the profitability has cooled off compared to earlier levels may be constructive for the rally’s chances to see a continuation, just like it did last month.

BTC Price

At the time of writing, Bitcoin has been trading at around the $65,700 level, down more than 5% over the past week.

Bitcoin Price Chart

 

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Bitcoin Flash Crash Washes Out 81,000 Crypto Traders For Over $220 Million

Bitcoin has started out the new week on a rather bearish note after a flash crash sent the price below $69,000 once more. There has since been some recovery in the price of the largest cryptocurrency in the space. However, the damage has already been done as tens of thousands of crypto traders were flushed out of their leveraged positions as a result.

81,000 Crypto Traders Lose $220 Million

The Bitcoin flash crash hit support just above $68,800 but crypto traders are already feeling the brunt of the large move. In the last day, more than 81,000 traders have lost their leveraged positions and the volume of their liquidations have piled up.

According to data from Coinglass, the numbers have climbed above 81,400 crypto traders who were liquidated as a result of the crash. In total, over $223 million was also lost during this time from all of the flushed positions. Then, the single largest liquidation took place on the OKX exchange across the ETH-USD-SWAP pair. This trader alone lost $7 million when their position was liquidated.

As expected, the majority of the losses have come from long traders, with Coinglass showing a total of 70.01% of the liquidated positions being longs. This means that long liquidation volumes climbed above $156 million during the last 24 hours.

The crypto exchange with the largest liquidation volumes was the OKX exchange, accounting for 46.87%, or $104.61 million, of all liquidations. Binance came in second place with 38.72%, or $86.41 million. Meanwhile, Bybit saw the third-largest liquidation volume at 8.4%, or $18.75 million.

Bitcoin, Ethereum, And Dogecoin Lead Liquidations

Naturally, the crypto assets with the largest liquidation volumes have been Bitcoin and Ethereum, with $36.1 million and $28.98 million. However, meme coins such as Dogecoin and PEPE have seen their own numbers ramp up as well.

Dogecoin’s liquidation volumes came out at $10.4 million for the 24-hour period, which put it ahead of Solana with $8.3 million. Then coming up behind Solana is PEPE, with liquidation volumes climbing as high as $7.1 million.

Across all of these cryptocurrencies, long traders continue to suffer massive losses. Even in the shorter timeframe, the trends for long traders continue to look bleak. Coinglass data shows that in the last 12 hours, long traders accounted for 85.64% of liquidations. Then, in the 4-hour and 1-hour timeframes, they account for 6.182% and 72.62%, respectively.

As for the Bitcoin price, bulls continue to struggle as resistance at $69,500 mounts. The price is currently trading at $69,450 at the time of this writing, with a 1.1% decline in the last day, according to data from Coinmarketcap.

Bitcoin price chart from Tradingview.com

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Bitcoin Plunges Under $63,000, Here’s Where Next On-Chain Support Is

Bitcoin has deepened its decline in the past day with its price now slipping below $63,000. Here’s where the next potential support is, according to on-chain data.

Bitcoin Could Find Support At These Price Levels

In a new post on X, analyst Ali has discussed how the Bitcoin support and resistance levels are looking like right now based on on-chain data from Glassnode.

The indicator of relevance here is the “UTXO Realized Price Distribution” (URPD), which, in short, tells us about the amount of coins (or more precisely, UTXOs) that were last purchased at any given price level that the asset has visited in its history so far.

Below is the chart shared by the analyst that shows the data for this distribution for the price levels around the recent spot value of the cryptocurrency:

Bitcoin URPD

From the graph, it’s visible that there are a few price levels not far from the current one that particularly stands out in terms of the amount of buying that took place at them.

In on-chain analysis, the potential for any level to act as support or resistance is based on the total number of coins that have their cost basis at the level in question.

Levels thick with coins that are situated under the current price would be probable to act as points of support, while those above the spot value could prove to be resistance walls.

As is apparent from the graph, the $61,100, $56,685, and $51,530 levels are the ones below the current price that hold the cost basis of a notable amount of the supply right now. Naturally, this means that should the decline continue further, these would be the levels to watch for a possible rebound.

Two levels above, however, are even larger than all three of these support levels: the cost basis centers around $66,990 and $72,880. Interestingly, the latter of these is the single largest acquisition level out of all the price levels listed in the chart, implying that a large amount of FOMO buying has occurred at the asset’s all-time high levels.

In the scenario that Bitcoin regains its upward momentum, these levels of high cost basis population would be where the asset could be most probable to find some trouble.

Now, as for why acquisition centers are considered relevant for support and resistance in on-chain analysis is the fact that investors are likely to show some kind of reaction when a retest of their cost basis takes place.

When such a retest is from above, the holders may decide to accumulate more, believing that the price will go up again in the future. On the other hand, they may sell instead if the retest is from below, as they may think exiting at break-even is better than risking another drop.

A large number of coins having their cost basis at the same level means a potentially large degree of one of these reactions happening and, hence, a strong support or resistance effect on the price.

BTC Price

Bitcoin is inching closer to the first major on-chain support level as it has now dropped to $62,700.

Bitcoin Price Chart

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Bitcoin To $53,200? Why History Says It’s Possible

As Bitcoin drops below $68,000, history suggests this correction is rather tame for bull markets, as plunges to this deep on-chain level have been the norm.

Bitcoin Short-Term Holder Realized Price Is Currently Around $53,200

As pointed out by CryptoQuant Netherlands community manager Maartunn in a post on X, BTC still has a decent margin over the realized price of the short-term holders.

The “realized price” is an on-chain metric that keeps track of the average price at which the Bitcoin investors acquired their coins. The indicator calculates this value by going through the transaction history of each coin and assuming that the last transfer of it was the last time it was purchased (that is, the price at the time is its current cost basis).

When the spot value of the cryptocurrency dips below the realized price, it means that the average investor is now in a state of loss. On the other hand, a break above implies the market as a whole has entered into net profits.

In the context of the current discussion, the realized price for only a particular segment of the investors is of interest: the “short-term holders” (STHs). The STHs include all the investors who bought their coins within the past 155 days.

Now, here is a chart that shows the trend in the Bitcoin realized price specifically for this cohort:

Bitcoin Short-Term Holder Realized Price

As displayed in the above graph, the Bitcoin STH realized price has shot up recently as the price of the asset has gone up. This makes sense, as this group includes the most recent buyers, who would continuously be buying at higher prices in an uptrend, thus raising their average cost basis.

At present, this cohort’s realized price is about $53,200. During the past day, BTC has seen a sharp drop that has taken its price below the $68,000 mark, but clearly, the STHs would still be in high profits even after this drawdown.

“In previous bull markets, the average cost basis of short-term holders was fully reset multiple times,” explains Maartunn. This trend is most prominent in the data for the 2017 bull run when the price retested this level several times.

An interesting pattern that has been held is that these retests of the level during bull trends have generally resulted in the cryptocurrency finding support and turning itself back around.

The explanation for this trend may lie in the fickle nature of the STHs. The cost basis is an important level for these investors, and when a retest of it happens, they panic and show some reaction.

During uptrends, these holders are more likely to buy more when a retest of their cost basis occurs since they may think that the same price levels that were profitable earlier will be so again in the near future.

Naturally, it’s not a certainty that Bitcoin would also end up retesting this level in this bull market. Still, a correction might reach close to it if the historical precedent is anything to go by.

BTC Price

Following its 7% drop in the past day, Bitcoin is trading at around $67,700.

Bitcoin Price Chart

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Bitcoin Suffers Crash To $65,000 As Spot ETF Inflows Wane

Bitcoin is closing out the week on a rather bearish note after suffering a massive crash in the early hours of Friday. The crash pushed the price below $66,000, drawing the rest of the crypto market down with it in the process. The reason for this crash could be traced back to what started the bull run in the first place – Spot Bitcoin ETFs.

Spot Bitcoin ETF Net Flows Suffer

After a long strength of what seemed to be only inflows for Spot Bitcoin ETFs across the space, institutions seem to be scaling back on their buying this week. The data aggregation platform Spot On Chain, revealed that net flows into these ETF dropped drastically over the last few days.

The decline was first noted on Wednesday, March 3, when daily net inflows had experienced a 38% crash. Interestingly, Wednesday had seen the second-largest daily inflow for these Spot BTC ETFs. However, with outflows ramping up at the same time, the net inflows have begun to wane.

This trend continued on Thursday, March 14, as net inflows into the Spot ETFs registered another massive crash. This time around, it fell 80.6% compared to the prior day, which had already seen a 38% decline. As a result, the ETFs saw their worst trading day in over a week.

Nevertheless, the ETFs are still seeing positive inflow which suggests that outflows continue to dim compared to inflows. However, if the outflows continue to rise, then Bitcoin could suffer tremendously from this, with an example of what could happen being the market crash from the Grayscale Bitcoin Trust outflows.

BTC Price Struggles To Recover

After falling to $65,600. The Bitcoin price is struggling to recover from the flash crash. There was a quick buy up of the dip, indicating a lot of demand for BTC at low prices. This demand has been able to brush up the price, causing it to rise once more before being rejected at $68,700.

Presently, the BTC price is circling $66,500, with the $68,000 level proving to be the next significant resistance for the price. But even if the crypto was able to beat this level, there is still the matter of the mounting resistance at $68,700, making it an important resistance level to beat.

The crash has seen Bitcoin’s price decline over 8% in the last day, bringing its market cap down to $1.33 billion. This crash has also proven detrimental for altcoins, with the likes of Ethereum, Dogecoin, and Cardano seeing an average decline of 10%.

Bitcoin price chart from Tradingview.com

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Bitcoin Crash Triggered By Failed $1 Billion Hedge Fund Spread Trade: Expert

The Bitcoin price has crashed from over $72,000 yesterday to as low as $65,500. As reported earlier today, there are several obvious reasons for this, such as the liquidation of extensive long positions on the red-hot futures market, expectations of a “higher for longer” policy by the US Federal Reserve as a result of hotter than expected inflation data and a relatively weak inflow day for the spot ETFs yesterday.

Did This Trigger The Bitcoin Crash?

However, there is also a rumor that reveals yet another hidden reason for the crash: a failed spread trade by a hedge fund that resulted in over a billion dollars in losses. Andrew Kang, the founder of Mechanism Capital, revealed on X the intricate details of this debacle.

“Apparently a fund blew out $1b+ on the MSTR-BTC spread trade today. They covered into the close which is why BTC dumped and MSTR premium went to the highs. PNL pocketed by based Saylor and will be put back into BTC.”

Kang had earlier elucidated the precarious nature of market transitions, citing the downfall of several major players due to flawed delta-neutral strategies. “You get some really wonky stuff that happens in market trend transitions. Like large delta-neutral funds/institutions getting blown out on ‘risk-free’ spread trades,” Kang remarked, pointing to past failures of notable firms like Blockfi, DCG, Genesis, Three Arrow Capital and Alameda.

MicroStrategy, under the leadership of Michael Saylor, has notably been a leveraged play on Bitcoin, with its substantial holdings often leading to significant interest from short sellers. According to Kang, “MSTR currently has $3b of short interest – roughly 20% of its float. I imagine a lot of that float is angry tradfi boomers trying to capture the premium to NAV.”

The premium discrepancy Kang refers to—surging from 50% pre-ETF to 13% post-ETF, and recently peaking at 70%—illustrates the volatile dynamics at play between MicroStrategy’s stock value and its underlying Bitcoin holdings.

Trade Gone Wrong

Renowned Bitcoin analyst Bit Paine and German crypto analyst Florian Bruce corroborated the narrative, pointing to the unwinding of a significant spread trade as the catalyst for the market movements. “That dip was because a fund blew up on their MSTR/BTC short,” Bit Paine remarked.

Bruce provided a clear exposition of the strategy gone awry: “A hedge fund set up a spread trade shortly before the ETF approval: Long BTC & Short MSTR. The idea behind it was that MSTR will fall through the ETF while BTC rises.” This explanation lays bare the hedge fund’s miscalculation, as the actual market response saw MSTR outperformed Bitcoin, necessitating a rapid unwinding of positions that contributed to Bitcoin’s sharp price decline.

“BTC was sold and the shorts on MSTR were closed (MSTR bought). This is probably also the reason why MSTR has just had a small mini rally and is doing less badly than other BTC ETFs. Enjoy the dip. I don’t think it will last long,” Bruce stated.

The supposed hedge fund in question, North Rock Digital, had previously outlined its contrarian strategy on X, expressing skepticism towards the valuation of crypto equities in the lead-up to ETF approvals.

“The contrarian idea […] was to short crypto equities vs long spot crypto. In our view, as we approach the ETF, crypto equities have been being used as proxies for spot exposure […] once the ETF becomes available we expect this flow to reverse as many of these holders rotate exposure into the ETF. Given the dislocated nature of many of these names (MSTR, MARA and COIN are our three favorite shorts), we believe there are several attractive shorts to pair against long spot exposure,” North Rock Digital stated in January.

At press time, BTC traded at $67,588.

Bitcoin price

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Bitcoin Short-Term Holders Panic Capitulate $2.6 Billion In BTC Crash

On-chain data shows that Bitcoin short-term holders have panic sold $2.6 billion worth of coins in the crash following the new all-time high.

Bitcoin Short-Term Holders Have Sent Huge Volume In Loss To Exchanges

As analyst James V. Straten explained in a new post on X, Bitcoin short-term holders have shown signs of capitulation during the latest drop in the cryptocurrency’s price.

The “short-term holders” (STHs) refer to the BTC investors who bought their coins within the past 155 days. The STHs make up one of the two main divisions of the market, the other one being the “long-term holders” (LTHs).

Statistically, the longer an investor holds onto their coins, the less likely they are to sell at any point. This means that the STHs, who are relatively new hands, generally sell quickly whenever an asset crash or rally occurs. The LTHs, on the other hand, usually show resilience, only selling at specific points.

One way to track whether either of these groups is selling is through the transfer volume they are sending to exchanges. First, here is a chart that shows the trend in the Bitcoin exchange inflow volume precisely for the STHs in loss:

Bitcoin Short-Term Holders

As displayed in the above graph, the Bitcoin STHs have transferred around $2.6 billion worth of coins in loss to exchanges in the past day, implying that some members of this cohort have capitulated.

This spike is huge, but it’s less than the loss-taking event that took place back during the price drawdown that followed the BTC spot exchange-traded fund (ETF) approval.

These loss sellers would be those who FOMO’d into the rally that took BTC to a new all-time high beyond the $69,000 level, but their conviction wasn’t strong enough that they were able to hold past the sharp crash that BTC observed shortly after.

The STHs aren’t the only ones who have exited the market in this latest price volatility; it would appear that the LTHs have also done some selling. The difference, however, is that these HODLers have made profits.

The chart below shows how the exchange transfer volume for the LTHs in profit has looked like recently.

Bitcoin Long-Term Holders

The graph shows that the Bitcoin LTHs have participated in their largest profit-taking event since July 2021, transferring tokens worth $1.5 billion to exchanges.

Thus, it would appear that this recent volatility has shaken up the conviction of even some of the diamond hands, although these HODLers have at least still been rewarded with profits.

BTC Price

At the time of writing, Bitcoin is trading around the $65,800 mark, up 8% in the past week.

Bitcoin Price Chart

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Why Did Bitcoin Price Crash 10% After Reaching $69,000 All-Time High?

The flagship crypto token, Bitcoin, finally hit a new all-time high (ATH) on March 5 but quickly dipped by over 10% after this price surge. As explained by this market analyst, this sharp correction was to be expected and could become a norm heading into the bull market.

“Bull Markets Are Not Straight Lines Up”

Alex Thorn, Head of Research at Galaxy Digital, noted in an X (formerly Twitter) post that the market doesn’t move to the upside unfettered, even in a bull market, and corrections are to be expected. He alluded to the 2021 bull run, where Bitcoin experienced around 13 corrections of 10% or more between 2020 and the peak when the crypto token hit its previous ATH.

Thorn also referenced the 2017 bull run, noting that the same thing occurred then as Bitcoin experienced 13 drawdowns of 12% or more. Therefore, what happened with Bitcoin recently isn’t unusual, and more corrections are likely to occur as the crypto token hits new highs on its way to the peak of this market cycle. 

Meanwhile, as revealed by Thorn, something similar happened in December 2020 when BTC touched its prior ATH of $20,000, then traded 11.3% lower for the next 15 days before going on to “definitively” break its ATH. If the same thing happens now, the analyst believes that could be good for Bitcoin, stating that “some consolidation would be healthy” after its year-to-date gains. 

Moreover, it is worth mentioning that Bitcoin has been on a run since the end of last year (just before the Spot Bitcoin ETFs were approved) and hasn’t slowed since then. Therefore, a significant pullback for the flagship crypto token seems long overdue. 

Profit Taking Is To Be Expected For Bitcoin

Crypto analyst Guy Turner suggested in an X post that profit-taking could have been the cause of the pullback and that more profit-taking is likely to take place. Investors aggressively taking profit was to be expected considering that Bitcoin hitting a new ATH ultimately put all wallets holding the crypto token in profits. 

Turner also noted that these corrections are healthy for a sustainable long-term market. It also allows investors to position themselves and accumulate more BTC during the dip. On the bright side, the bull market is all but confirmed, with Bitcoin hitting a new ATH. According to crypto analyst Ali Martinez, this cycle is expected to continue until sometime in October 2025. 

At the time of writing, Bitcoin is trading at around $65,900, down over 2% in the last 24 hours, according to data from CoinMarketCap. 

Bitcoin price chart from Tradingview.com

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These Events Will Create A Bitcoin Crash In March: Arthur Hayes

Arthur Hayes, the founder of BitMEX, in his latest essay, presents a foreboding prediction for the Bitcoin market in March, anticipating a severe correction of 30-40%. His detailed analysis, rooted in a deep understanding of market dynamics, outlines the complexities and driving factors behind this expected crash, respectively healthy but deep correction.

Hayes begins his discourse with a cautionary reminder of the nascent state of the crypto bull market, warning enthusiasts not to be overly carried away. “The crypto bull market is in its early stages, and we must not get carried away with our enthusiasm,” he says, highlighting the uncertain journey towards the inevitable collapse of the fiat financial system.

Why The Bitcoin Price Could Fall 40% In March

His prediction revolves around three key financial events and indicators converging in March. Hayes first points to the anticipated decline in the Reverse Repo Program (RRP) Balance to a critical level of $200 billion, a scenario he believes will trigger market anxiety about future sources of dollar liquidity. He describes this threshold as a moment of reckoning, “When this number gets close to zero… the market will wonder what is next,” underscoring the gravity of this anticipated development.

The second pivotal factor is the fate of the Bank Term Funding Program (BTFP), which is due to expire on March 12th. Hayes portrays this as a significant test for the financial system, speculating on the decision-making process of the US Treasury in the face of potential liquidity crises among banks. He articulates the market’s anticipatory stance, suggesting that “the market will start getting inquisitive many weeks before about whether or not the banks will continue receiving this lifeline.”

The final piece in Hayes’ forecast is the Federal Reserve’s meeting on March 20th, where a rate cut is expected. This decision, in Hayes’ view, is crucial for setting market expectations and influencing the dynamics surrounding dollar liquidity provision by the Fed and the US Treasury Department.

Hayes then delves deeper into his tactical trading strategy in response to these events, detailing his plans to short the crypto market using Bitcoin puts. He articulates his approach, saying, “I will look to buy a sizable put option position on Bitcoin around this time,” signaling his preparedness to leverage the anticipated market shift.

An important aspect of Hayes’ analysis is the potential impact of the US-listed spot Bitcoin Exchange Traded Funds (ETFs). He argues that the anticipation of substantial fiat capital inflows into these spot ETFs could initially propel Bitcoin’s price to soaring highs. However, he warns that this upsurge could be followed by a dramatic correction, exacerbated by a liquidity squeeze.

“Imagine if the anticipation of hundreds of billions of fiat flowing into these ETFs at a future date propels Bitcoin above $60,000,” he says, illustrating the potential for a steep decline. Hayes explains that a market already heightened by ETF speculation would be particularly vulnerable to a sharp correction, potentially worsening the downturn to 30-40% in the event of a liquidity crunch.

How Hayes Will Trade This Scenario

Hayes then shifts to discuss his tactical trading decisions in response to these indicators. He shares his plan to initially short the crypto market using Bitcoin puts, followed by a return to selling US Treasury bills and acquiring more Bitcoin and cryptocurrencies. In explaining his approach, Hayes states, “I will look to buy a sizable put option position on Bitcoin around this time,” indicating his readiness to capitalize on the predicted market downturn.

Furthermore, Hayes details his strategy for Bitcoin puts, explaining the rationale behind choosing puts expiring on June 28th and his approach to selecting the strike price. He emphasizes the importance of timing and market dynamics, noting, “I expect Bitcoin to experience a healthy […] correction from whatever level it has attained by early March.”

In his conclusion, Hayes contemplates various scenarios that could play out differently from his predictions. He considers the implications of a slower decline in the RRP, a potential extension of the BTFP by Yellen, or alternative outcomes of the Fed’s March meeting. He notes that each of these scenarios could lead to different market behaviors, necessitating adjustments in his trading approach.

At press time, BTC traded at $43,940.

Bitcoin price

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Crypto Futures Razed To Ground As $659 Million Rekt With Bitcoin Crash

Data shows the cryptocurrency futures sector has gone through a mass liquidation event in the past 24 hours as Bitcoin has witnessed a sharp crash.

Crypto Futures Liquidations Have Added Up To $659 Million In Past Day

The cryptocurrency market has seen sharp price action during the past 24 hours. As is usually the case during such volatility, chaos has occurred on the futures side of the sector.

According to data from CoinGlass, almost $660 million in futures contracts have found liquidation on the last day.

Bitcoin & Crypto Liquidations

“Liquidation” here naturally refers to the process that any contract undergoes when it racks up losses equivalent to a specific percentage of the position (which may differ between platforms). The exchange has to close it forcibly.

The above table shows that the longs took the brunt of this liquidation flush, as they saw contracts worth about $568 million decimated. This equals about 86% of the total liquidations in the past day.

The forceful closures have been so lopsided due to the sector observing a sharp drawdown following Bitcoin’s crash that took its price to as low as $41,500.

It’s also visible in the table that about $613 million of the total liquidations came during the last twelve hours alone, which again lines up with price action as that’s when the market was most volatile.

Regarding the individual contributions from each of the different symbols, it’s no surprise that Bitcoin-related contracts occupied the largest share of the liquidations at about $148 million.

Bitcoin Futures

Generally, though, BTC makes up for a huge part of the total market liquidations, but this time, the asset’s percentage share isn’t too extraordinary. Ethereum (ETH) and Solana (SOL) are the next biggest contributors to the squeeze, with about $111 million and $34 million in liquidations, respectively.

Historically, mass liquidation events like the one seen today haven’t exactly been a rare sight in the cryptocurrency sector due to the high volatility that most coins display on the regular and extreme amounts of leverage being easily accessible in many exchanges.

Recently, the interest in the derivatives side of the sector has become especially pronounced, as CryptoQuant Netherlands community manager Maartunn has talked about in a recent post on X.

Bitcoin Spot & Futures Volume

As displayed in the graph, the Bitcoin futures volume has generally been higher than the spot volume during the last few years, but the gap between the two especially widened during the second half of 2023.

The indicator’s value saw some decline in the last couple of months of the year, but the recent values of the metric have still been quite high compared to the norm in the past.

Bitcoin Price

Bitcoin has seen some recovery since its initial crash, as the asset is now trading around the $42,700 mark.

Bitcoin Price Chart

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Crypto Expert Explains Why The Bitcoin Price Crash To $40,000 Is Not A Bad Thing

A crypto expert has explained why a Bitcoin pullback (possibly to around $40,000) isn’t a bad thing. This comes as there is a growing concern that the flagship cryptocurrency could soon lose all the gains it has achieved in recent times. 

A Bitcoin Correction Is Necessary

In a post on his X (formerly Twitter) platform, William Clemente, the co-founder of Reflexivity Research, suggested this correction was necessary as it would “shake out “weak hands” and leverage, allowing for a stronger foundation for eventual moves higher.” He further mentioned that Bitcoin’s volatility “is a feature, not a bug.” 

He made this statement in relation to his assertion that the crypto token has doubled in two months with no pullbacks. Although it hasn’t exactly doubled, Bitcoin has, however, experienced a significant surge these past few months. This has come on the back of the possibility of the Securities and Exchange Commission (SEC) approving the pending Spot BTC ETF applications.  

This impressive rally has indeed happened, with the flagship cryptocurrency hardly experiencing any pullback. The bulls have firmly remained in control, with the bears having to bear the brunt of this as many continue to experience heart-wrenching liquidations. However, just like with every other asset, a correction is always expected at some point, and that could be now. 

Bitcoin price chart from Tradingview.com

A BTC Correction is Already Happening

Bitcoin is already facing a retracement as more longs than shorts have liquidated in the last 24 hours, according to data from Coinglass. In an earlier X post, Clemente had warned that there would “be sharp corrections along the way as the market shakes off greedy leveraged longs.”

Meanwhile, the reason for the breather from Bitcoin could also be a result of those waiting on the sidelines to see the outcome of the macroeconomic events happening this week. This includes the CPI inflation data that is set to be released on December 12, which will be closely followed by the FOMC meeting happening on that same day and December 13. 

Many will be hoping that the outcome of those events is rather positive as that would further ignite the bullish sentiment that is currently reverberating throughout the crypto community. Irrespective of what happens, this sentiment isn’t expected to dwindle as many still have their sights set on January when a Spot Bitcoin ETF could be approved. 

Liquidity is also flowing into the ecosystem, with digital asset investment products experiencing their 11th straight week of inflows at $43 million. Bitcoin remains the major focus of these investors, with the flagship crypto token seeing $20 million in inflows. 

At the time of writing, Bitcoin is trading at around $42,000, down in the last 24 hours, according to data from CoinMarketCap. 

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Analyst Predicts Bitcoin And Crypto Market Crash Of Epic Proportions, Here’s When

Bitcoin and the entire crypto market are currently in an uptrend which has been a cause for celebration for investors all across the space. However, not everyone expects this uptrend to continue. One crypto analyst has made a case for why Bitcoin and the crypto market at large could be headed for an epic crash.

Why Bitcoin And Crypto Will Crash

A crypto analyst who goes by Shelby on the TradingView platform has put forward an analysis of why the price rally will end in a massive crash. The analysis which began on October 24, 2023, starts out with expectations of a price rally for Ethereum to the $3,200 level before a breakdown to $200-$600.

A follow-up comment shows the expectation for ETH to actually reach $2,100. Or in special circumstances, reach $3,200 while Bitcoin runs up to $36,000 if the ETHBTC pair reaches 0.088 BTC. The second part of this has since played out in that the Bitcoin price has now crossed $36,000 but Ethereum continues to lag behind below $2,000.

This bullishness ends in 2023, however, as the analyst expects a crash to happen sometime between Q1 and Q2 2024. They liken this crash to the early 2020 crash that sent crypto rallies spiraling to new lows before the bull market began.

The price targets for this predicted crash would see the likes of Bitcoin and Ethereum fall more than 50% from their current levels. For Bitcoin, the analyst puts it at sub-$15,000 for the first half of 2024 and Ethereum at sub-$500.

However, it is not all gloom as the crypto analyst expects both assets to rally quite well leading up to 2025. “Given my expectation is BTC will top ~70k in 2025, ETH perhaps will top $ 5 – 10k. So buying altcoins in the looming crash will end up very lucrative.”

Bitcoin price chart from Tradingview.com (Crypto)

What Happened In 2020?

The trend pattern for Bitcoin in 2019 is eerily similar to that of 2023 so far. Just like November 2023, the Bitcoin price had recovered in November 2019, taking the rest of the crypto market with it as well. This rise in price would continue on into the early parts of 2020, but that run would be cut short not long after.

Historical data shows that BTC’s price peaked just above $10,000 in February 2020, before the crash began. By March, the price of the asset had fallen almost 50% to $5,400 before the halving took place. This kind of crash is what the analyst is pointing to.

If there is a repeat of this, then the current Bitcoin rally could continue on to early 2024, likely reaching a peak of $40,000. But the market bottom might already be marked in November 2022, as a 50% fall would not bring the BTC price below $15,000.

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Bitcoin Whales Buy Dip, Addresses Now At Pre-Crash Levels

On-chain data shows the Bitcoin whales have been buying the dip, as their addresses have surged back towards pre-crash levels again.

Bitcoin Whales Have Fully Recovered To Their Pre-Crash Number

As pointed out by an analyst in a post on X, the whales appear to have been accumulating recently. The relevant indicator here is the “whale address count,” which measures the total number of Bitcoin addresses that hold at least 1,000 BTC and at most 10,000 BTC.

At the current exchange rate, this range converts to approximately $26 million at the lower bound and $260 million at the upper bound. These are clearly very significant amounts and the only investors large enough to be owners of these addresses would be the whale entities.

The whales naturally carry some influence in the market, due to the fact that they hold a notable part of the total circulating supply of the asset. Thus, their movements can be worth keeping an eye on, as they can influence the price of the asset.

Another version of the indicator tracks the addresses with balances upwards of 10,000 BTC (that is, this range’s upper bound), but at those levels, the wallets become more likely to belong to central entities like exchanges, so the trend in their addresses may not hold the same significance as what that of the normal whales would.

Now, here is a chart that shows the trend in the Bitcoin whale address count over the past month or so:

Bitcoin Whale Address Count

As displayed in the above graph, the whale address count observed a large drop around the time of the asset’s crash a few days back, where the price plummeted from the $29,000 level to below the $26,000 mark.

This decline in the number of addresses of these humongous investors would imply that some members of this cohort participated in distribution during the crash.

These whales who participated in the selloff didn’t necessarily clear out their entire holdings and exit the market, though, as distribution just enough to bring their address balances below the 1,000 BTC mark would still lead to a drawdown in the indicator.

Initially, following the crash, the number of these large Bitcoin holders remained flat, implying that there wasn’t any significant accumulation or distribution taking place.

In the past few days, however, the BTC whale address count has registered a sharp spike, suggesting that more whale-sized addresses have popped up on the network. With this uplift, the indicator has returned back to about the same values as it was before the price crash had occurred.

The whales participating in buying at the current price lows is naturally a positive sign for the cryptocurrency, as it could provide a more solid foundation for a rebound in the asset’s value.

BTC Price

At the time of writing, Bitcoin is trading near $26,021, down 1% in the last seven days.

Bitcoin Price Chart

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Will Bitcoin Show A Repeat Of The March Rebound?

Will Bitcoin observe a repeat of the rebound that took place after the crash back in March? Here’s what this on-chain metric suggests.

Bitcoin Short-Term Holder SOPR Is Showing A Pattern Similar To March

As an analyst in a CryptoQuant post explained, if the BTC short-term holder SOPR crosses above 1 in the coming days, a rebound might occur. The “Spent Output Profit Ratio” (SOPR) here refers to an indicator that tells us whether the investors are selling their Bitcoin at a profit or a loss right now.

When the value of this metric is greater than 1, it means that the average holder is currently moving their coins at a profit. On the other hand, values under this threshold imply that loss-taking is the dominant behavior in the market.

The SOPR being precisely equal to one naturally suggests that the investors are just breaking-even on their selling currently, as the total amount of profits realized in the market is precisely canceling out the losses.

In the context of the current discussion, the SOPR for only a specific market segment is of interest. Namely, the short-term holder (STH) SOPR is the relevant metric.

Here is a chart that shows the trend in the 7-day simple moving average (SMA) Bitcoin STH SOPR over the past few months:

Bitcoin STH SOPR

The STH group includes investors who purchased their BTC less than 155 days ago. This cohort makes up one of the two main segments of the market, the other side being the “long-term holders” (LTHs).

As displayed in the graph, the 7-day Bitcoin STH SOPR had been floating around the neutral mark before the recent crash, but following it, the metric has plunged into the loss territory. This would suggest that the STHs have been panic-selling at a loss after they witnessed the cryptocurrency register a deep drawdown.

The chart shows that the crash back in March of this year also pushed the STHs into selling at a loss. The lowest value that the 7-day STH SOPR has seen in the current crash so far has been similar to what the March crash observed.

Historically, capitulation has allowed the asset to form bottoms, as in such events, the weak hands exit the market, and the more persistent investors may pick up their coins.

This effect seems to have worked in March, as the coin hit its bottom during the STHs’ capitulation. As the loss selling slowed down, Bitcoin rebounded in speculator fashion, as its price jumped below $20,000 to near the $30,000 mark.

Currently, the STHs’ loss selling is slowing down, as the metric’s value is gradually rising. The latest capitulation may have also allowed BTC to form a bottom this time. It remains to be seen whether that was the case, and if Bitcoin can show a rebound similar to back in March.

BTC Price

At the time of writing, Bitcoin is trading around $26,000, down 11% in the last week.

Bitcoin Price Chart

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Bitcoin Investors Fall Into Fear As BTC Crashes To $26,500

Data shows the Bitcoin market sentiment has plunged into fear as the cryptocurrency’s price has observed a crash to the $26,500 level.

Bitcoin Fear & Greed Index Points At “Fear” In The Market

The “Fear & Greed Index” is an indicator that tells us about the general sentiment among investors in the Bitcoin and wider cryptocurrency market. This metric uses a numeric scale that runs from 0-100 for displaying the sentiment.

All values above the 54 mark suggest the presence of greed among the investors, while those below 46 imply a majority mentality of fear. The region between these cutoffs reflects the neutral sentiment.

As for how the index calculates the sentiment, Alternative.me, the creator of the metric, explains that it takes into account several different factors. Namely; volatility, trading volume, social media sentiment, market cap dominance, and Google Trends are what the indicator currently makes use of to pinpoint the market mentality.

Now, here is what the Bitcoin Fear & Greed Index’s value looks like right now:

Bitcoin Fear & Greed Index

As you can see above, the index’s value is 37 currently, which suggests that the majority of the investors are fearful. This latest value of the indicator reflects a new shift in the sector, as prior to today, the indicator had been stuck inside the neutral territory for more than three weeks straight.

The below chart displays the trend in the fear and greed index over the past year.

Bitcoin Fear

From the graph, it’s visible how sharp this latest drop in the metric has been. In a flash, the market sentiment went from being completely neutral (50), to firmly inside the fear territory (37).

The reason behind this hit to the investor mentality has been the sharp crash that Bitcoin has observed during the past day, as the cryptocurrency’s price has now slumped below $26,500.

Earlier, when the index was consolidating in neutral territory, investors had been hesitant and undecided. But with this price action, it would appear that their mind has been made up, and they think that the asset would go down even lower.

Historically, the market has actually tended to make moves that the majority of the holders aren’t expecting. The harder investors lean toward any one direction (fear or greed), the more probable price action of the opposite type becomes.

The Bitcoin Fear & Greed Index also has two sub-sentiments inside fear and greed called extreme fear and extreme greed. These take place at values below 25 and above 75, respectively. Cyclical bottoms and tops in the asset have usually always formed whenever the market has been inside these zones, showcasing the aforementioned effect in action.

As the market hasn’t yet dipped too deep into the fear region, the probability of a bottom is likewise not raised too much yet. Back in March, however, Bitcoin did manage to find its bottom when the investors were fearful to a degree not much greater than right now.

It now remains to be seen how the market sentiment will develop in the coming days, and if BTC will be able to find its bottom off the back of this fearful situation.

BTC Price

At the time of writing, Bitcoin is trading around $26,400, down 10% in the last week.

Bitcoin Price Chart