Bitcoin rebound triggers $100 million in short liquidations

abdelaziz Fathi

Bitcoin’s price soared past the $42,000 mark on Friday, reaching heights not seen in over a week. This surge resulted in the liquidation of almost $96 million worth of cryptocurrency short positions, as per data from Coinglass.

Grayscale Bitcoin Trust (GBTC)

Within 24 hours, liquidated bitcoin leveraged positions spiked to over $41 million, with shorts accounting for more than $37 million of this amount. The largest cryptocurrency by market capitalization witnessed a 5% increase in the past day.

This uptick in Bitcoin’s price coincided with the expiration of a significant number of bitcoin options on Friday. Prior to the expiry, there were 94,000 bitcoin options set to expire, featuring a put-call ratio of 0.51. This ratio is often seen as a bullish sign for the asset.

Following Friday’s expiry, the open interest in bitcoin options has seen a notable decline, easing the derivatives market’s pressure on the digital currency.

Earlier in the week, BitMEX Co-Founder Arthur Hayes had a different outlook, predicting a continuous decline in bitcoin’s price. Hayes forecasted a 30% correction from the post-ETF approval high of $48,000, suggesting a support zone between $30,000 and $35,000 for bitcoin.

Despite these predictions, bitcoin rebounded this morning. Grayscale’s GBTC, which is in the process of converting to a spot ETF, witnessed slowing outflows for the third consecutive day. The outflows on Jan. 25 were $394.1 million, showing a decrease from the previous days, yet still significant. A significant portion of this exodus is attributed to FTX’s bankruptcy estate, which reportedly dumped 22 million GBTC shares, amounting to close to $1 billion.

The Grayscale Bitcoin Trust, which had operated as a closed-end fund for a decade, accumulated nearly $30 billion in assets before the U.S. Securities and Exchange Commission (SEC) approved its conversion into an ETF, along with the approval of 10 newly created bitcoin ETFs.

In contrast, the newly launched spot bitcoin ETFs, including those from BlackRock, Fidelity, and others, have not experienced any daily outflows yet. IBIT recorded the highest inflows on Thursday with $170.7 million, followed by FBTC and BITB. However, these inflows were not sufficient to offset the GBTC outflows, resulting in a net outflow of nearly $80 million.

  • Read this next

    Institutional FX

    Intercontinental Exchange reinvents voice trading with ICE Voice

    “For the first time, ICE’s users will have a single, integrated platform for chat and voice that matches both traders’ need for always-on, instantaneous connectivity with other traders, and firms’ desire for easy-to-access and use records that help them meet their record retention requirements.”

    Fintech

    Duco launches EMIR-compliant transaction reporting eligibility validator

    “With Duco’s transaction reporting eligibility validator, customers can run independent checks whenever they want, get results in minutes, and access a clear audit trail. The solution provides insights at a field-by-field level so clients can see specific issues, discuss, and show ESMA they are considering discrepancies at a deep level.”

    Digital Assets

    Bybit’s trading volume near all-time high ahead of Bitcoin halving

    “Now, we’re seeing large inflows and smart money is moving fast. With the Bitcoin halving just around the corner, Bitcoin is proving itself as an institutional asset, a hedge against economic uncertainty, and a vote for financial freedom.”

    Digital Assets

    Morgan Stanley to add spot bitcoin ETFs

    Morgan Stanley is reportedly considering adding spot bitcoin ETF products to its brokerage platform. This move comes after the Securities and Exchange Commission (SEC) approved the investment vehicle in January.

    Digital Assets

    Hong Kong ends license applications for crypto exchanges

    Hong Kong has officially ceased accepting license applications from cryptocurrency exchanges as of February 29, signaling a stringent regulatory shift.

    Fintech

    Volt secures EMI license, expands payment solutions in UK

    Volt has successfully obtained an Electronic Money Institution (EMI) license from the UK’s Financial Conduct Authority (FCA).

    Retail FX

    ASIC bankrupts finfluencer Tyson Scholz over stock tips

    The Australian Securities and Investments Commission (ASIC) has effectively bankrupted Tyson Robert Scholz, the figure behind “Black Wolf Pit.” The action marks a significant crackdown on so-called ‘finfluencers’ and individuals providing unlicensed financial services.

    Digital Assets

    Green Bitcoin Presale Raises $1M as Bitcoin Approaches its ATH

    The eco-friendly crypto project Green Bitcoin has seen its limited-time presale phase cross $1 million in funding. With an innovative gamified staking model and energy-efficient foundation, Green Bitcoin offers token holders a way to stake their tokens and generate yield.

    Web3

    Introducing QuickNode Streams: Elevating Blockchain Data Management

    Discover QuickNode’s Latest Innovation: Streamlining Blockchain Data Streaming for Enhanced Efficiency and Accessibility. Explore the Future of Blockchain Technology with Streams.

    <