Thursday’s sell-off was one of the worst and most damaging in the history of the cryptocurrency market: more than $2.6 billion was liquidated into Bitcoin It fell to $60,000, its lowest level since October 2024.
The decline caused Bitcoin to become the third most “oversold” market in history, according to the Relative Strength Index (RSI), a momentum oscillator that tracks market conditions. Historically, oversold conditions of this degree precede significant rallies.
Things get brighter as Asia wakes up, Bitcoin rebounds from $60,000 to over $65,000, while Ethereum It fell back from a low of $1,750 to $1,920.
Even so, the broader cryptocurrency market remains in a bear market. Privacy coin zcash It has lost 34% of its value over the past week, while optimism Solana and Ethereum’s losses are both around 30%.
Traditional markets have also struggled in recent days. The Nasdaq 100 Index has fallen 6% since January 28, and precious metals gold and silver have fallen 12% and 38% respectively during the same period.
Derivatives Positioning
- Cryptocurrency futures market value fell below $100 billion for the first time since March 2025, as traders continued to reduce risk as prices fell and liquidations led to wealth losses.
- More than $2.6 billion in leveraged futures bets have been liquidated or forced out by exchanges due to a margin shortage within 24 hours. Of that, more than $2.1 billion was in long bets. This shows the degree of bullish leverage deployed around key support at $70,000, which was breached on Thursday.
- Futures open interest (OI) has declined relative to all major coins, including HYPE, which has been outperforming recently.
- Annualized perpetual funding rates for major tokens such as BTC, SOL, XRP and DOGE have turned negative as plummeting prices sparked demand for bearish bets. Negative interest rates could lead arbitrageurs to turn to reversal cash and arbitrage bets.
- Bitcoin’s annualized 30-day implied volatility surged to nearly 100% on Thursday night as traders rushed to buy put options, with some snapping up these bearish bets with strike prices as low as $20,000. Volatility has since fallen back below 70%. A similar pattern exists for Ethereum’s implied volatility.
- Still, volatility premiums for short-term puts on Bitcoin and Ethereum remain 20 points or more higher than calls, suggesting lingering downside concerns. Prices for long-dated puts also remain higher.
- Options tied to the BlackRock IBIT ETF saw record trading activity on Thursday, with traders rushing to buy put options. The one-year bias rose to over 25 points, reflecting the huge premium on put options, indicating that fear is at its peak.
token talk
- Despite the broader market’s decline on Thursday, there were some unlikely winners in the altcoin industry. privacy laws Up 31% in 24 hours, it seemed unaffected by the carnage as it rose further, from $17.4 to $24.2.
- In relative terms, HyperLiquid’s HYPE token continues to perform well, rising 11% for the week despite falling 4% in the past 24 hours.
- XRP, one of the most volatile altcoins, plunged more than 30% before rebounding 21%. Trading volume exceeded $14 billion, an increase of 143% in 24 hours.
- The CoinDesk 20 (CD20) and CoinDesk 80 (CD80) are both down around 6% in the past 24 hours, but the most worrying corner of the market is DeFi, with the DeFi Select Index (DFX) underperforming the broader market, down more than 10%.
- CoinMarketCap’s “Altcoin Season” indicator currently stands at 24/100, down from Wednesday’s high of 32/100, suggesting investors are seeking safer, less volatile assets such as Bitcoin or stablecoins.