After the options expiry, the cryptocurrency market experienced a much-needed recovery, witnessing a surge in market cap to $1.62 trillion. Favorable indicators, including a low put-call ratio, provided ideal conditions for traders to buy Bitcoin and Ethereum. This led to a rebound in BTC and ETH prices, sustaining positive sentiment on Saturday.
The Crypto Market Fear and Greed Index saw a notable increase from 49 (neutral) to 55 (neutral) today, indicating rapid changes in sentiment among market participants.
Factors contributing to the market’s upswing include the expiration of $5.8 billion in Bitcoin and Ethereum options, resulting in significant short liquidations. Technical indicators, liquidation events, and macro influences played a role in the market dynamics.
Over the past 24 hours, the crypto market witnessed liquidations exceeding $120 million, with nearly $90 million attributed to short positions. Notably, BTC short positions worth over $40 million were liquidated, leading to the liquidation of more than 40,000 traders. The largest single liquidation order on Binance’s ETHUSDT amounted to $2.53 million.
Apart from Bitcoin and Ethereum, several altcoins, including SOL, SUI, ORDI, TRB, MANTA, CFX, ALT, and XRP, experienced significant short liquidations in the last 24 hours. As a result, SUI recorded a 21% increase, MANTA rose by 15%, and CFX showed an 18% gain.
The surge in Bitcoin and Ethereum prices can be attributed to increased futures and options open interest following the expiry, with substantial buying activity observed in the U.S. crypto market. Traders turned bullish after the U.S. Federal Reserve’s preferred inflation metric, US PCE, cooled to 2.9%, below market expectations.
BTC futures open interest on CME surged by 9% to $17.97 billion in the last 24 hours, while Binance, Bybit, Coinbase, and Kraken also reported similar positive data. Total BTC futures open interest increased by over 3% in the last 24 hours.
ETH futures open interest experienced a modest increase of 0.60% to $7.87 billion in the past 24 hours. Notably, data suggests active bullish sentiment among U.S. traders.
In the broader economic context, the US 10-year Treasury (US10Y) slipped to 4.13% from six-week highs of 4.16%, and the US dollar index (DXY) approached 103.50 following key economic data. Recent macro data indicates the likelihood of the Federal Reserve maintaining the policy rate in the 5.25%-5.50% range in the upcoming FOMC interest rate decision on Jan 31.
BTC’s price recorded a 5% jump in the past 24 hours, currently trading at $41,717, with a low and high of $39,902 and $42,209, respectively. Trading volume increased by 40% in the last 24 hours, indicating heightened interest among traders.
ETH’s price stands at $2,265, reflecting a 3% increase in the last 24 hours, with a low and high of $2,196 and $2,282, respectively.
