Futures traders betting on a rise in cryptocurrency prices saw about $217 million liquidated in the past 24 hours, as approval of Bitcoin (BTC) exchange-traded funds continues to be a “sell the news” event, a contrarian bet that shows nothing. . Signs of slowdown.
Concern that cryptocurrency fund manager Grayscale is selling some of its bitcoin as owners of the Grayscale Bitcoin Trust (GBTC) removed funds from the ETF has contributed to the price decline. Verified wallets belong to Grayscale, are tracked and ranked by Arkham Analysis CompanyThey show the fund transferred more than $400 million worth of bitcoin to its Coinbase Prime custodian on Thursday — which could be a step toward an eventual sale.
Bloomberg Intelligence analyst Eric Balchunas also pointed out That GBTC shares flipped to a 0.9% discount to its net asset value on Thursday “likely due to selling pressure.”
Bitcoin fell below $42,000 late Thursday, down 3.7% since Thursday and 15% from December to $49,000. This led to a market-wide pullback, with Ethereum (ETH) down 2.5%, Solana down 6.5%, and Cardano’s ADA down 5%.
BNB Chain’s BNB token outperformed the market and rose 0.6%, supported by launch pads on the closely related Binance exchange, where users can stake BNB to gain an allocation to new projects listed on the platform.
The price drop caused highly leveraged futures betting on rising prices to see $217 million in losses, with Bitcoin trades taking in $88 million from liquidations alone.
Liquidation occurs when an exchange forcibly closes a leveraged trader’s position due to partial or total loss of the trader’s initial margin. This occurs when a trader cannot meet the margin requirements for a leveraged position (fails to have enough funds to keep the trade open).
Meanwhile, some traders said in a note on Friday that they expect broader cryptocurrency markets to be broader in the short term.
“BTC is hovering above the $40,000-$42,000 area, which will likely serve as short-term support,” Rachel Lin, CEO and co-founder of Singapore-based SynFutures, said in an email. “Overall, last week can be summed up as the calm after the storm. The ETF mania phase is over, and the market is moving sideways, looking for the next catalyst.