Bitcoin Futures in whirlwind, could it defy bearish odds in near-term
Bitcoin, Ethereum, and other major cryptocurrencies crashed, wiping around $100 billion from the combined crypto market. At press time, the global cryptocurrency market cap dropped by more than 7% to $1.6 trillion.
The sudden crash comes amid the aftermath of the Federal Reserve’s hawkish 50-basis point interest rate hike. To add to this, the Bank of England too raised interest rates by 25 bps.
Market data platform Santiment opined that traders appeared to believe that Thursday’s cryptocurrency spike was an ‘anomaly’. Yesterday’s market jubilation met extreme sell calls as per the graph below.
Source: Santiment
As per the analytical firm, the aforementioned picture showed,
“Crypto traders appear to believe that yesterday’s market-wide price surge was an anomaly, and the short celebration won’t last. Historically, when calls for #selling spikes, crowd (FUD) like this strengthens the case of a continued rise.”
The collective market didn’t paint a stable picture for digital assets to rally in the short term. Bitcoin, the largest cryptocurrency, is indeed the first victim to fall prey to this scenario.
On the derivatives side, over 26,500 BTC worth of open interest was added to the market, but during the sell-off on Thursday, most of this open interest amounting to 25,000 BTC has been closed, according to a tweet from Glassnode.
<p lang=«en» dir=«ltr» xml:lang=«en»>#Bitcoin Futures markets have seen a whirlwind 24hrs following Fed rate hikes yesterday.Over 26.5k $BTC worth of open interest was added to the market during yesterdays rally.
However during the sell-off today, almost all of this open interest (~25k $BTC) has been closed out. pic.twitter.com/2yytI5wHIw
— glassnode (@glassnode) May 5, 2022
In addition, the ‘implied dovish’
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