Nearly £800 million (approximately $1 billion) in crypto futures positions were liquidated within 24 hours. This occurred as Bitcoin briefly dipped below $60,000, triggering significant volatility. Negative funding rates indicate that capital is currently skewed towards short positions rather than bullish ones.
While implied volatility pulled back from Wednesday's highs, offering some support for the overnight bounce, the put-call skew remains extreme, highlighting a continued bearish sentiment among traders.
Solana (SOL) experienced a dramatic 75% slide from its September peak, touching $64 on Wednesday. A further break below $60 would push it to its lowest level since December 2023, underscoring the broader market fragility.
Despite these challenges, the crypto market demonstrated some resilience on Thursday. Bitcoin, trading at £49,000 (approximately $61,646.55), gained 1.1% since midnight UTC after its brief dip below $60,000 on Wednesday, which marked its lowest point since October 2024.
Bitcoin remains at a critical juncture in terms of its overall market structure. A sustained break lower could see its price fall to around £41,000 (approximately $52,000). For now, it appears to have weathered the immediate storm.
Ethereum (ETH) also saw a positive movement, rising 1.5% on Thursday to trade at around £1,300 (approximately $1,644). This followed a swift plunge to £1,230 (approximately $1,550) on Wednesday afternoon. Thursday's gains for both BTC and ETH are likely linked to strengthening US equities, with S&P 500 and Nasdaq 100 futures up 0.7% and 2.2% respectively.
Bitcoin revisited lows near £47,000 (approximately $59,000) on Wednesday but has since bounced back above £48,000 (approximately $61,000). This two-way volatility proved costly for leveraged futures bets across the market, with long positions accounting for the majority of liquidations.
Interestingly, Bitcoin's futures open interest (OI) has surged to 763,000 BTC, the highest since 4th June, breaking a period of stability around 730,000 BTC. This indicates a significant inflow of capital, though not necessarily favouring bullish sentiment. Annualised funding rates have turned negative, suggesting traders are paying a premium for downside exposure.
In contrast, the Ethereum futures market has not seen a similar increase in OI, and funding rates remain slightly positive. Solana's OI, however, is close to Wednesday's record high, with largely neutral funding rates indicating balanced market positioning. XRP's OI is also hovering at its highest levels since October.
The OI-normalised, 24-hour cumulative volume delta (CVD) for most cryptocurrencies, including Bitcoin, has remained negative for a third consecutive day. This signals that bears are currently driving price action by actively shorting at market prices, rather than utilising passive limit orders.
