Bitcoin fell more than 7% at one point, with $780 million in bullish cryptocurrency bets being liquidated
Bitcoin has experienced the largest drop in over a month in the past week, leading to the liquidation of speculative cryptocurrency positions. At the same time, bullish cryptocurrency bets worth about $780 million have been liquidated in the past 24 hours. Due to escalating geopolitical risks, investors are turning to safer assets such as bonds and the US dollar, causing risk assets like Bitcoin to be abandoned. Bitcoin has still risen by 60% this year, partly due to the upcoming halving event. However, investors are feeling nervous about the uncertainty before the halving. The implied volatility of Bitcoin options has increased, indicating a decrease in market participants' confidence in the price direction
According to the Smart Finance app, Bitcoin experienced its largest drop in over a month on Friday, triggering a series of speculative cryptocurrency position liquidations. Data shows that Bitcoin fell by 7.5% to $65,214 at one point, then partially recovered, ending the day with a drop of over 4%; Ethereum, on the other hand, dropped by 12% at one point, marking its largest intraday decline since November 2022, with the closing drop narrowing to over 8%.
Meanwhile, data from Coinglass shows that approximately $780 million worth of bullish cryptocurrency bets were liquidated in the past 24 hours. Escalating geopolitical risks have roiled financial markets, prompting investors to shift to safer havens such as bonds and the US dollar, while risk assets like Bitcoin were abandoned. Chris Newhouse, a DeFi analyst at Cumberland Labs, stated, "As all cryptocurrencies are correlated with risk assets, a slight price drop quickly turned into a comprehensive liquidation."
Bitcoin has still risen by around 60% so far this year, partly due to the upcoming halving event expected to take place on April 20th. Ravi Doshi, the market director at FalconX, mentioned that they are currently seeing buyers entering the market ahead of the halving next week to capitalize on this opportunity.
However, a closely watched indicator in the options market suggests that investors are starting to feel nervous ahead of the halving, whereas the indicator had previously shown bullish sentiment among investors. In a report, Kaiko Research noted a significant increase in implied volatility of Bitcoin options over the past week, reversing the previous week's downward trend. Analyst Adam McCarthy from Kaiko Research stated that a rise in implied volatility typically indicates a decrease in market participants' confidence in price direction. When implied volatility rises, traders are usually willing to pay higher prices to protect existing positions or speculate on potential price fluctuations, whether upwards or downwards