BTC fell below the $28,000 mark, its lowest level since June 20 this year. In the past 48 hours, the price of BTC has continued to decline from 29330 USDT to a minimum of 27676 USDT, with a maximum drop of 5.6%. BTC was temporarily reported at 27,900 USDT, a 24-hour drop of 3.8%.
Affected by the decline of BTC, the encryption market as a whole performed poorly, with a decline of more than 3% in the past 24 hours. Among them, the lowest price of ETH fell to 1718 USDT, a 24-hour drop of 4.4%. Among the top 50 tokens by market capitalization, the top three decliners are SHIB (-11.7%), BSV (-7.4%) and BCH (-5.5%).
According to Tradingview data, the current total market value of encryption has dropped to $1,153.3 billion, a 24-hour drop of 3.3%. From the perspective of market capitalization, BTC’s market capitalization ratio remains above 50%, temporarily reported at 50.09%, which is 1.94% lower than this year’s high (52.03%). ETH’s market value accounted for 19.25%, returning to the level around June 20.
In terms of derivatives trading, Coinglass data shows that in the past 4 hours, the entire network has liquidated 102 million US dollars, of which Bitcoin BTC 0.78% liquidated 43 million US dollars and Ethereum ETH 0.49% liquidated 35 million US dollars. In the past 24 hours, the amount of liquidation on the entire network reached 224 million US dollars, the amount of liquidation of long orders was about 201 million US dollars, and the amount of liquidation of short orders was about 22.62 million US dollars. A total of 59,289 people became victims of liquidation, the largest single liquidation The single occurred in OKX-ETH-USD-SWAP, worth 6 million US dollars.
Encryption-related listed companies were also affected by the rising market, and their stock prices generally corrected today. Among them, the US compliant encryption platform Coinbase (NASDAQ: COIN ) shares fell 2.9% to $76.80. The stock price of MicroStrategy (NASDAQ:MSTR), the largest listed company with bitcoin holdings, rose 5.2% today to $353.9.
There are several possible reasons for the recent decline in the crypto market:
First, the spot trading market is shrinking, and existing users are fighting in the derivatives market, which affects the short-term market direction. According to The Block data, the 7-day average of spot trading volume on crypto exchanges fell to $11.2 billion, less than 30% of March ($46.26 billion). At the same time, the open interest in the derivatives market has increased significantly. For example, the open interest of Bitcoin contracts on Bybit reached a 16-month high in the last two days, and CME Bitcoin futures hit the highest monthly trading volume this year in July.
Especially in recent times, Bitcoin volatility is at an all-time low. Kaiko data shows that Bitcoin’s 90-day volatility has dropped to 35%, and the 30-day volatility is approaching a five-year low. Bitcoin volatility is currently lower than the S&P 500 Index, technology stocks, gold, etc.
The longer volatility remains low, the more vulnerable the system will become, the more leverage will be used, and the market will usher in major changes in the short term. Judging by today’s results, the bears appear to have won this time around.
UTXO Management analyst Dylan LeClair said: “The current market is just an endgame in which derivatives traders are fighting each other. Most of the spot bearish traders have already sold out, while the spot bullish traders may have fully deployed their funds, or Still on the sidelines awaiting approval for a bitcoin spot ETF.”
The second is that the market stock funds are insufficient, and the new currency is sucking blood when it goes online. With the shrinking of spot transactions and the weakening of Bitcoin volatility, another direction of the game in the market revolves around the new currency. In the past two days, Sei (SEI) and CyberConnect (CYBER) have been launched on major platforms, attracting attention.
Taking SEI as an example, its 24-hour turnover on South Korea’s Upbit exceeded US$400 million, accounting for a quarter of the platform’s total turnover on the day, and nearly four times the turnover of the BTC/KRW trading pair (US$120 million). The funds in the market are limited, and the blood-sucking of the new currency further reduces the liquidity of the market, and the market has declined.
The third is that investors may shift assets from high-risk Bitcoin to U.S. bonds. The decline coincided with a surge in U.S. bond yields, with U.S. 10-year Treasury yields climbing to 4.31% on Aug. 17, the highest level since October 2022, suggesting investors are turning to safer assets, while Not inclined to choose cryptocurrencies such as Bitcoin.
Regarding the market outlook, the encryption data analysis company Santiment tweeted that the encryption market may be about to rebound.
The ratio of losing trades to winning trades recently hit a five-month high, historically a sign of a bottom, according to Santiment data. “Historically, a high ratio of losing trades to winning trades has increased the probability of a rally more than any profit-taking.”
From the perspective of the big cycle, Bitcoin is still bullish. At the data level, the amount of BTC reserves on exchanges has decreased, and the number of long-term BTC holders has recently hit a record high.
At the news level, several companies’ bitcoin spot ETF applications are expected to be approved next year. At the macro level, the Fed is in the late stage of raising interest rates, and it is expected to stop raising interest rates next year, starting a new round of bull market.
