In an unanticipated twist, Bitcoin (BTC) rapidly covered its Monday slump to the shocking three-month low value of sub-$25,000 during the Asian trading hours, bouncing back to roughly $26,000. The sudden recovery poises intriguing questions about the persistent influence of prominent exchanges like Binance, Bybit, OKX, and Deribit as their open interest swooped down from $5.05 billion to $4.8 billion. This retracement in open interest indicates a diminishing confidence of short traders who seem to be retreating from their bearish positions which they held previously, a phenomenon simply referred to as a ‘short squeeze.’
However, as tempting as this recovery may seem, it is prudent to question its longevity. Without robust bullish catalysts, chances are the resurgence may face considerable resistance. The exciting anticipation for the bitcoin spot ETF once filling the crypto universe has evaporated, supplanted instead by a looming threat; the speculated liquidation of FTX’s altcoin holdings.
According to Matrixport, an estimated $3.4 billion worth in altcoins are set to be offloaded by the beleaguered FTX exchange, throwing the market into predictions of an altcoin crash. FTX seeks to recuperate $200 million every week by selling off its crypto assets and returning fiat currency to its users. This strategy hints at a persistent bearish market for altcoins throughout the impending period.
Moreover, some crypto-orientated venture capital (VC) funds are reportedly feeling the heat to return investor funds, raising the possibility of these funds turning into consistent altcoin sellers. Matrixport’s head of research, Markus Thielen, sparks doubts about the existing predicament by suggesting that the VC funds might be obligated to liquidate their positions.
Navigating through the unfolding dilemma, Bitget, however, sees advantages, launching a $100 million investment into exchanges, data analytics firms, and media organizations. Partly inspired by layers-2 blockchain networks and DeFi technologies’ impending growth, Bitget plans to evolve traditional operations of centralized exchanges.
Matrixport dives deeper into the Ethereum narrative by inferring that Ether’s price sounds overvalued relative to the dwindling revenue generated across the Ethereum blockchain. Hence, looming doubts hang over the heads of ETH Hodlers, creating an air of uncertainty over its values. As the twists and turns of the crypto market proceed, one can merely anticipate and speculate on the unfolding future.
Source: Coindesk
