Bitcoin falls to a two-week low following the liquidation of $300 million in long positions.

Bitcoin dropped below $67,000 and ether approached $2,000 as stock markets declined, oil surpassed $100, and leveraged positions were unwound, indicating fragile market sentiment.

Bitcoin tumbles to weekly low (CoinDesk Data)

What to know:

• Nearly $300 million in long liquidations versus $50 million in shorts underscores the unwinding of crowded bullish positions across crypto futures.
• Increasing oil prices and concerns over the Iran conflict foster a risk-averse atmosphere, affecting crypto along with Nasdaq futures, which are now approximately 10% lower than January peaks.
• Altcoins lag as shorting interest grows (e.g., XRP, SHIB), while ONDO distinguishes itself with gains related to ETF tokenization announcements.

The cryptocurrency market sank to its lowest point in over two weeks, with bitcoin BTC$66,434.88 falling below $67,000 and ether (ETH) nearing $2,000. The CoinDesk 20 Index (CD20) fell by 2.2% since midnight UTC, marking its lowest level since March 9.

This decline coincided with a downturn in U.S. equities. Nasdaq 100 futures are currently trading at 23,760, which is 10% lower than this year’s January high.

The risk-off sentiment was driven by rising oil prices and concerns that the conflict in Iran may not de-escalate as quickly as previously anticipated. Oil prices remain above $100 per barrel, exacerbating inflation worries.

Some segments of the altcoin market experienced significant losses on Friday, with ETHFI declining by 6% since midnight. WLD, WIF, SEI, and FET all recorded losses between 3.6% and 4.7%.

Derivatives positioning

• Long crypto futures positions, or optimistic bets on market direction, experienced substantial liquidations in the last 24 hours, with nearly $300 million liquidated compared to only $50 million in short positions.
• This marks the fifth occasion in 10 days where longs have faced such significant losses, indicating that traders were largely expecting the Iran conflict to lead to a price rally that has yet to occur.
• XRP’s price dropped over 2.5% within 24 hours, while open interest in futures increased by 2% to 1.95 billion XRP, the highest level since February 2.
• This scenario reflects renewed investor interest in shorting the declining market. Negative cumulative volume delta and funding rates below zero support this view.
• Futures linked to bitcoin, solana, dogecoin, and BNB exhibited a bearish profile similar to XRP.
• Memecoin SHIB has the highest negative open-interest-adjusted cumulative volume delta among major tokens, indicating aggressive derisking or shorting by traders.
• Canton Network’s CC token was notable for its positive funding rates and an increase in futures open interest, both suggesting rising demand for bullish exposure.
• The 30-day implied volatility indices for bitcoin and ether, BVIV and EVIV, continued to decline despite weak spot prices, indicating that traders are not yet panicking and do not foresee a tumultuous selloff.
• On Deribit, bitcoin options worth over $15 billion expired early Friday. Thus, the anticipated expiry-related price target of $75,000 is no longer applicable, paving the way for potential further declines amid a deteriorating macroeconomic outlook.
• Bitcoin and ether puts are once again trading at a 6 to 8 volatility premium compared to calls across all expirations, as per risk reversal data. This indicates persistent demand for downside protection.

Token talk

• The altcoin market demonstrated its vulnerability again on Friday, failing to maintain crucial support levels in a low-liquidity trading context.
• The CoinDesk Computing Select Index (CPUS) was the poorest-performing benchmark, dropping by 2.3%, while the bitcoin-dominant CoinDesk 20 (CD20) fell by 1.2%.
• One token that defied the downward trend was ONDO, which increased after Ondo Finance, an asset management firm, announced its agreement to tokenize five Franklin Templeton exchange-traded funds (ETFs) and bring them to the Ondo Chain.
• The token has risen by over 8% in the last 24 hours, although it has retraced some of those gains since midnight UTC.
• The average relative strength index (RSI) across all crypto tokens remains neutral despite the market decline, indicating that further decreases are probable on Friday.