Bitcoin hits a new high, then crashes back down by $10,000 in one minute. Is the bull still here?
Leverage returns to a healthy level, and funds from the traditional world are still entering the market. Will you choose to increase your position or take profits and exit?Author: Nan Zhi, Odaily Planet Daily
Yesterday at 11 PM, BTC briefly broke through 69,000 USDT, reaching a high of 69,080 USDT, surpassing the previous high of 69,040.1 USDT set in November 2021.
OKX market data shows that BTC only surpassed the previous high for less than 1 minute, after which the entire crypto market experienced a rapid decline. At 3:55 AM, BTC dropped to 59,000 USDT, and ETH fell to a low of 3,179 USDT. As of the time of publication, the decline has somewhat recovered, with BTC currently at 63,300 USDT, a 24-hour drop of 7.8%, and ETH at 3,524 USDT, a 24-hour drop of 3.5%.
CoinGecko data shows that the total market capitalization of cryptocurrencies has fallen to 2.47 trillion, with a 24-hour drop of 5.9%. Alternative data indicates that crypto users' trading enthusiasm has significantly decreased compared to yesterday, with today's Fear and Greed Index at 75, categorized as "Greed", while yesterday's index was 90, categorized as "Extreme Greed", setting a new high since February 2021.
In terms of derivatives trading, Coinglass data shows that in the past 24 hours, the total liquidation across the network reached 1.154 billion USD, with long positions liquidated at 888 million USD and short positions at 266 million USD; BTC liquidations amounted to 323 million USD, and ETH liquidations were 208 million USD. Binance's BTC contract open interest is 6.66 billion USD, with a 24-hour decrease of 10.9%, indicating significant deleveraging.
Downward Pressure ------ Early Profit-Takers Cashing Out
Why did the rapid pullback occur after reaching a new high? It may be related to early profit-takers cashing out:
CryptoQuant data shows that before Bitcoin's new high began to plummet, an address over 10 years old transferred 1,000 BTC to Coinbase. According to CryptoQuant's analysis, this address is related to miners.
CryptoQuant analyst Bradley Park stated in an interview: "Exchange order data shows that there is liquidity of 5-10 BTC for every 100 USD price range, and the sale of 1,000 BTC is very likely to trigger a significant price drop. Especially at a time like Tuesday, traders are waiting to short Bitcoin."
The enthusiasm for ETF market trading is still significantly rising, with yesterday's Bitcoin spot ETF daily trading volume reaching 10 billion USD, setting a new daily trading volume record. Farside Investors data shows that GBTC saw an outflow of 332.5 million USD yesterday, and currently, three ETF net flow data remain undisclosed, with the disclosed portion showing a net outflow of 125.8 million USD yesterday, contributing to market pullback pressure. Ultimately, whether there is a net outflow depends on whether IBIT continues to buy significantly like in previous trading days.
Rates Returning to Healthy Levels
Before Bitcoin reached the new high of 69,000 USD, many altcoins had rates as high as 0.2% to 0.4%, and some coins charged fees every 4 hours. Between March 1 and 5, BTC's average rate was as high as 0.06%, reflecting the market's high leverage and fervent sentiment.
After the decline, rates have somewhat returned to rational levels, with currently only one OGNUSDT perpetual contract rate exceeding 0.1%, and 12 coin contract rates exceeding 0.03%. BTC's rate has also returned to 0.0207%.
Greeks.Live researcher Adam posted on X platform stating: "After Bitcoin successfully hit a historical new high, it turned to a dramatic drop, briefly falling below 60,000 USD. Derivative data represented by futures basis has completely cooled down, with the bull market FOMO sentiment peaking and then crashing. In terms of options, against the backdrop of the dramatic drop, the implied volatility (IV) of major term options has slightly decreased, with ultra-short-term options also declining, which is noticeably different from previous market conditions."
Which Coins Were Unaffected?
The Binance gainers list shows that currently, only 10 tokens have increased by more than 1% today, mainly small-cap coins, including:
SYN (28.7%), ERN (16.2%), WIF (12.6%), JST (8.2%), STRK (5.8%), AR (5.4%), FIS (4%), LSK (3.3%), CELR (2%), BICO (2%).
Is the Bull Still Here?
According to LD Research personnel @kanazawa0x0, a series of funds have already allocated to the IBIT issued by BlackRock, with the largest holding being Germany's AV Balanced Fund, which has allocated a weight of up to 5%. Although the scale is still less than 10 million USD, this is just the beginning, especially when passive strategy ETFs have the characteristic of not referencing prices during allocation.
Meanwhile, major players are continuing to apply for Ethereum spot ETFs. Today, the U.S. SEC postponed its decision on Fidelity's Ethereum spot ETF application, and yesterday it postponed its decision on BlackRock's Ethereum spot ETF, but it may also bring continuous expectation and imagination space and capital inflow power after approval, similar to Bitcoin spot ETFs.
The long leverage has been mostly cleared after yesterday's sharp drop, and traditional market funds are still continuously flowing in. With significant events like halving and BTC L2 approaching, the bull market may have just begun.
