Over $1Bln Liquidated in Latest Price Drop, Futures in Backwardation & Spot Still in Choppy-Range
161,894 traders have been liquidated this time as an intense chopping session wipes out shorts and longs alike. Market sentiment is of “extreme fear” right now and at the same level as March 2020.
The price of Bitcoin went down yet again.
In the latest downward swing, BTC price went low as $32,177 on Coinbase and is now back above $33k. Despite this drop, BTC remains in its $32k-$40k range.
Sell-off in Bitcoin sent other crypto asset prices crashing as well, with Ether going to $2,430. The total cryptocurrency market cap, as a result, tumbled to $1.54 billion, a level last seen in late May and before that in mid-February when the market was in euphoria. ETH -2.87% Ethereum / USD ETHUSD $ 2,996.91
-$86.01-2.87% Volume 19.37 b Change -$86.01 Open $2,996.91 Circulating 117.7 m Market Cap 352.74 b 8 h South Korea’s Largest Crypto Exchange Operator Raises $85 Million at an $8.65 Billion Valuation 9 h DeFi Rallies on China Ban as Chinese Turn to Decentralized Projects, Crypto Prices Recover to Pre-ban Levels 1 d YFI Creator Andre Cronje Launches a Vampire Attack on Popular Ethereum NFT Marketplace OpenSea
The latest drop in prices resulted in the 161,894 traders being liquidated for $1.06 billion, as per Bybt. Now that Binance doesn’t report its liquidations in full, Bybit is accounting for the majority of this liquidation.
This happened while the funding rate on the exchanges has been flat since the mid-may correction. Funding rates now went even deep into the negative territory and on the majority of the exchanges.
With this, futures are in backwardation again, meaning the current price of the underlying asset BTC is higher than its prices trading in the futures market.
“For now, guessing BTC holds 30k and stays in range rather than break down,” said trader CL of eGirl Capital. “Guess we chop > trend,” he added.
Amidst this, Crypto Fear and Greed Index is showing sentiments of “extreme fear” with a reading of 13, down from the reading of 73 last month, which showed “extreme greed” in the market early last month. The ongoing level of fear was last seen in March 2020.
Sentiment is so fucking bad here… unreal really.
Printer still going brr… crypto has never been more interesting…. tradfi markets near aths…
And sentiment as is bad as when we thought the world was literally ab to end / bitmex margin cascade in 2020. pic.twitter.com/u2AIq0d7FV
— 0x_Infinitum (@CryptoMessiah) June 8, 2021
The latest drop in prices has wiped out the majority of the gains Bitcoin made this year, and the crypto asset is now only up 12.80% YTD. In comparison, the S&P 500, which continues to hit new highs, is now up 12.53% this year so far.
While gold is only up 0.27%, WTI is recording 42.74% gains, and the dollar is still down 0.57%.
According to the mainstream media, the Justice Department recovering 63.7 BTC worth $2.3 million in a high-profile Bitcoin ransom could be the reason for this sell-off. The fact that investigators “could trace the untraceable and seize it might be undermining the libertarian, free-of-government-control case,” said Jeffrey Halley, a senior market analyst at Oanda.
However, the crypto community has been wondering just how exactly the FBI got its hands on the private key; an exchange is speculated to be of help here. So far, the crypto asset continues to trade in a choppy range, which the market is expecting for an extended period of time.
The cryptocurrency — which has more than tripled over the past year — is now in a “cooling off period” that could last “a few months” longer, said Vijay Ayyar, head of Asia-Pacific at crypto exchange Luno.
The market is so exhausted that it is unable to react positively to any good news while getting a beating at the smallest of negative implications. Following El Salvador adopting Bitcoin, Paraguay, Brazil, and Panama are also hinting at their support with the officials now donning laser eyes, but so far, the cryptocurrency prices don't care.
El Salvador adopting Bitcoin is a far bigger milestone than Tesla putting Bitcoin in their balance sheet. Its not even close.
It’s sad the market thinks otherwise just because they have a familiarity bias towards a famous billionaire vs. a country they can’t even find on a map.
— Qiao Wang (@QwQiao) June 7, 2021
Additionally, the Bitcoin conference in Miami has people excited about the future prospects, with Nic Carter of Coin Metrics sharing that bitcoiners are looking to step up their political ambitions. He said,
“Takeaways from some conf convs I had – proof of reserve is happening…nation state BTC land grab has begun. Look for chronic sovereign defaulters in eastern Europe & Latam to jump first – federalism will be a huge ally of bitcoin as TX & FL embrace.”