August 18, 2023

Bitcoin (BTC) has dropped 7% over the past 24 hours, plunging to levels not seen since June as the digital-asset market witnessed one of the worst sell-offs this year. Crypto traders were hit with $1 billion worth of liquidations over the past 24 hours, according to Coinglass data. The world’s largest cryptocurrency by market value was trading at around $26,400 at the time of writing, but briefly fell to $25,234 on Thursday. Altcoins performed slightly better with ether (ETH) losing 6% over the same time period and Solana’s SOL losing around 5%. Traders say market structure and liquidations were a likely reason for the sudden drop instead of a singular fundamental catalyst. “We've seen BTC OI ramp up in position, with a bias to shorts,” said Decentral Park Capital trader Lewis Harland, in a message to CoinDesk. “The break below $28,500 led to material volumes of longs being liquidated. This has been combined with spot selling ahead of the date (likely anticipating further delays).” 

Creditors of bankrupt crypto firm Celsius will hold a vote on the lender’s plan to sell its assets to the Fahrenheit consortium, after a judge on Thursday approved disclosures that suggested creditors can expect to recover 67%-85% of holdings. Approval marks one of the final steps on Celsius’ year-long march out of bankruptcy and the return of funds to customers, in a period which has seen widespread disruption in crypto markets and the arrest of former Chief Executive Officer Alex Mashinsky on fraud charges, which he has denied.

Securities regulators are poised to approve ether futures ETFs for the U.S., Bloomberg reported on Thursday. Several firms have applied to list these exchange-traded funds, which would hold derivatives contracts tied to ether – rather than ether itself. But they need the U.S. Securities and Exchange Commission's blessing, something Bloomberg said might be imminent. There are already U.S. ETFs that hold crypto derivatives: bitcoin futures ETFs. The industry is anxiously awaiting word on whether ETFs that hold bitcoin itself, not derivatives, might also get approval. Wall Street giants like BlackRock are seeking to create those, too.

A message from Bitget

Funding rates in bitcoin (BTC) perpetual futures listed worldwide crashed late Thursday after a sudden price slide put the recently popular short volatility bets at risk.

Perpetuals are futures with no expiry with a funding rate mechanism that helps tether perpetual prices to the index price. A negative funding rate suggests the dominance of bearish short positions, with shorts paying longs to keep their bets open. Positive rates indicate otherwise.

Funding rates on OKX, Deribit and Bybit crashed to -10% and more in annualized terms on Thursday, as bitcoin's average price tanked to $25,392, according to data source Velo. Bitcoin DVOL, the Deribit Implied Volatility Index gauging expected price turbulence over 30 days, jumped from an annualized 36% to 48.5%.

- Omkar Godbole

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