Bitcoin completely cut losses from Sunday’s slump as the leading cryptocurrency fell from around $ 48,600 to below $ 46,000 early Monday morning. As of 9:00 PM UTC (4:00 PM ET), Bitcoin was trading above $ 48,600 on Coinbase. However, the leading cryptocurrency has yet to trade above the psychologically significant $ 50,000 mark.
Much of Bitcoin’s troubled price action and its recent slump could be due to deleveraging in futures. Eager bulls piled on long trades expecting a quick breakout to $ 50,000 or more. According to market data from Skew, funding rates for perpetual Bitcoin futures rose steadily through February, with some funding rates hitting their highest levels in the past 12 months.
Bitcoin futures confirmed this market situation and, according to Bybit, recorded liquidated contracts worth over USD 520 million in the past 24 hours. The eager buyback following these liquidations suggests the market’s robust bullish move after overzealous bullish futures traders rolled back.
High positive refinancing rates signal an increase in long positions, while negative rates indicate a more bearish sentiment. The market tends to reset itself when traders, especially in overcrowded derivative positions, get excessively bearish or bullish.
Even if some traders are dissatisfied with the restless price movement, other market participants are amused. Bitcoin miners, for example, posted record sales of $ 354 million last week, beating the previous record of $ 340 million set in mid-December 2017. Network fees contributed over 15% to this revenue.
Ether, the second largest cryptocurrency by market capitalization, rose around $ 1,820 on Monday and rose less than 1% in 24 hours from 9:00 PM UTC (4:00 PM ET).
Shortly after Ether hit new record highs above $ 1,850, it also saw a sizeable decline, falling nearly 10% to around $ 1,660 early Monday. In the past 24 hours, Ether futures worth over USD 313 million per Bybit have been liquidated.
Overall, the DeFi sector followed, according to Messari. But Ethereum and the various assets in the DeFi ecosystem have since recovered. DeFi’s overall performance increased nearly 3% per Messari in the last 24 hours.
Other alternative cryptocurrencies have also recovered from the market slump. FTX’s altcoin index perpetual futures are up nearly 20% from their early Monday morning lows, fully tracking the correction.
Digital assets on CoinDesk 20 are X Monday. Notable Winners as of 9:00 PM UTC (4:00 PM ET):
