Bitcoin price drop: Crypto liquidations mount as Ether & Altcoins face macro pressure

New Delhi: The selling pressure in the crypto market is constantly increasing. In October, crypto witnessed a massive liquidation wave, with nearly $19 billion worth of digital assets being wiped out. Now, another wave is being witnessed. Now, the fall of Bitcoin has increased the heartbeat of crypto investors. The world's largest cryptocurrency slipped below $91,500 in intraday trade, erasing the entire year's gain. In the options market, traders are now placing strong bearish bets at the levels of 90,000, 85,000 and 80,000 dollars.

According to the data of Coinbase's Deribit unit, the demand for downside protection has increased rapidly. Put options, which expire by the end of November, are being heavily traded. In the last few days alone, such contracts worth more than $74 million have been purchased, which indicates a further decline in Bitcoin. Their demand is many times higher than bullish positions. Market experts say that for the last six months, buyers who were aggressively accumulating Bitcoin are now incurring huge losses and are not able to show the strength of new purchases.

Bitcoin's steady decline is making things more difficult for companies that were trying to become 'digital-asset treasuries' by accumulating crypto on a large scale this year. Although Michael Seller's Strategy Inc. has recently purchased more Bitcoin worth $83.5 million, many corporates may be forced to sell their holdings to save balance sheets under pressure. Due to this fear, there is a 'psychological overhang' in the market. Investors are not buying because they are at a loss, but they are not able to decide to sell.

According to CoinMarketCap's sentiment index, the market is in a state of 'extreme fear'. Falling prices, rising volatility and uncertainty of derivative positions have put the climate under further pressure.

The market's concern is not just limited to crypto. Confusion over Nvidia's forthcoming results and the Federal Reserve's possible interest rate cut in December has increased the pressure on risk assets. The S&P 500 fell by more than 1% on Monday, the impact of which was evident on the crypto as well. Kaiko analyst Adam McCarthy says that "discussions of the AI bubble and the Fed's tough stance have increased difficulties for crypto until the end of the year.”

Ethereum's token Ether is also under pressure. It slipped to $2,975 and has registered a 24% decline since the beginning of October. According to Amberdata's Greg Magadini, the stuck positions of digital-asset treasury companies are making Ether more vulnerable.

According to Coinglass data, there has been a sharp decline in futures open interest, especially tokens like Solana where positions have decreased by more than half. Kraken's global economist Thomas Perfumo says that "the current decline is not the result of the weakness of the crypto infrastructure, but of the macro economic uneasiness.”