First Mover Americas: Bitcoin Tumbles Below $26.5K

Providing insight into the crypto market's recent developments on August 18, 2023.

Bitcoin (BTC) has experienced a significant 7% decline within the past 24 hours, plummeting to levels reminiscent of June, as the digital asset sector witnessed one of its most pronounced sell-offs this year. Coinglass data indicates that crypto traders faced liquidations totaling $1 billion within the last 24 hours. The world's leading cryptocurrency, based on market value, was trading at approximately $26,400 as of the time of this report, momentarily dipping to $25,234 on Thursday. Altcoins fared somewhat better, with ether (ETH) experiencing a 6% loss during the same period, while Solana's SOL registered a decline of about 5%. Market observers suggest that the sudden drop was likely driven by factors such as market structure and liquidations, as opposed to a singular fundamental catalyst. Decentral Park Capital trader Lewis Harland noted, "We've observed an increase in short positions in BTC open interest, and the breach of the $28,500 level resulted in significant liquidation of long positions. This was coupled with spot selling ahead of a specific date (presumably anticipating further delays)."

Creditors of the insolvent crypto company Celsius are set to vote on the lender's proposal to divest assets to the Fahrenheit consortium. A judge granted approval on Thursday for disclosures that hint at creditors potentially recovering 67% to 85% of their holdings. This approval signifies one of the final stages in Celsius' year-long journey out of bankruptcy, marking the restitution of funds to customers. This period has been marked by substantial turmoil in the crypto markets, coupled with the apprehension of former CEO Alex Mashinsky on fraud charges, which he has refuted.

According to a report from Bloomberg on Thursday, regulators overseeing securities are on the brink of endorsing ether futures exchange-traded funds (ETFs) for the United States. Multiple firms have submitted applications to list these ETFs, which would encompass derivatives contracts linked to ether itself, rather than holding the cryptocurrency directly. These ETFs, however, necessitate approval from the U.S. Securities and Exchange Commission (SEC), a development that Bloomberg suggests is imminent. The U.S. already has ETFs centered on crypto derivatives, specifically bitcoin futures ETFs. The industry awaits a decision on whether ETFs that encompass bitcoin directly, not just its derivatives, will also secure approval. Esteemed financial entities like BlackRock are also vying to establish such ETFs.

Chart of the Day

Illustrated in the graph is the dollar-denominated value of ether, specifically on the Binance exchange, along with the concept of slippage, which denotes the variance between the price at which a trading order is executed and the price initially requested.

Interestingly, the data for Thursday highlights a remarkable increase in maximum slippage or the most significant daily slippage observed in a solitary market order. This surge is unparalleled since the occurrences witnessed back in September 2022.

This graphical representation effectively demonstrates the deteriorating state of liquidity within the market, shedding light on the challenging conditions that are prevailing.