Bitcoin is back on the slide on the weekend.
After recovering to $35,500 from the sell-off that took us under $28,000 earlier in the week, the price of Bitcoin dropped on Saturday to about $30,100.
In tandem with Bitcoin, Ether went to about $1,717. Other altcoins also crashed, sending the total cryptocurrency market cap to $1.3 trillion.
Before the latest drop in price, a massive Bitcoin margin short filled on Bitfinex on Friday. “Last two times large shorts built up on Finex a major price drop followed within 2-10 days. The execution method and time of the day are different this time,” noted trader and economist Alex Kruger.
The chart never looks good at the bottom
On the other hand, the chart doesn’t look good before we dump thousands of dollars usually either
— BIG DOG (@MoonOverlord) June 26, 2021
With trading extremely low on weekends and gas prices on Ethereum and decentralized exchanges also in low single digits, the market seems to be “getting to peak market apathy.”
“But soon people will realize BTC won’t nuke out of this range and BTC will lead rally if anything imo, most of downside risk is on alts, but I think we can sideways range low and just nothing happens cus its not like theres big longs to liq,” said trader CL of eGirl Capital.
Even after the recent deep rout and significant price volatility over the week, Bitcoin prices remain range-bound ever since the mid-May crash.
In the futures market, funding rates have fallen significantly and gone negative. What it says is, it is now hard for prices to drop in a straight line, bad time to sell if looking to time entries or exits, and it’s cheaper to use futures to short than perpetual contracts, said Kruger.
Bitcoin traders now paying 50% to 120% to short. pic.twitter.com/4iUWhaDoMD
— Alex Krüger (@krugermacro) June 26, 2021
Looking at OKEx futures data, the long/short ratio, indicative of general market sentiment, has not recovered since the cryptocurrency started crashing last week.
With the low premium for the quarterly contract which continues to shrink, testing 1% this week after running in the 3%-2% range in the last two weeks, the willingness to pay high premium shows loss of confidence in near-term price appreciation — though “very mild optimism,” it just reflects an uncertain market.
“Futures data shows lack of market conviction, but most indicators are near recent bottoms,” noted OKEx.
The declining margin lending ratio also shows retail is not buying to hold. Meanwhile, open interest remains muted; this recent stagnation is indicative of the market’s lack of interest in opening new positions.
Aggregated #bitcoin futures open interest has been remarkably stable over time pic.twitter.com/3yptnlRRSq
— skew (@skewdotcom) June 25, 2021
“We need to see this market stabilize and, more important, cease to be a news story,” Nicholas Colas, co-founder of DataTrek Research, wrote in a note this week.
“The good news is that time will come, and with it will be another great investment opportunity. Until then we’re cautious as the proverbial long-tailed cat in a room full of rocking chairs.”
Amidst all this, Tesla CEO Elon Musk has agreed to discuss bitcoin with Twitter co-founder and CEO Jack Dorsey at an event in July.
Dorsey suggested, “Let’s you and I have a conversation at the event. You can share all your curiosities…,” and Musk agreed with “For the Bitcurious? Very well then, let’s do it.
The event is scheduled to take place on July 21, according to its website, “offering a live experience and a library of content to the investor community, enabling a more informed discussion about the role Bitcoin can serve for institutions across the globe.”