Bitcoin price fell back below the $43,000 mark as several factors exacerbated bearish market sentiment on Monday.
According to The Block's Price Page, the world's largest cryptocurrency by market cap is down over 0.5% to $42,676 in the last 24 hours as of 12 p.m. ET.
According to Coinglass data, the price action led to the liquidation of over $75 million worth of cryptocurrency long positions. In the last 24 hours, liquidated leveraged Bitcoin positions rose to nearly $30 million, with over $18 million of that being long positions.
Bitcoin price fell below $43,000 on Monday. Image: The price page of the block.
Genesis files to sell Grayscale assets
The price move comes as bankrupt crypto lender Genesis Global Capital filed a new application with the U.S. Bankruptcy Court in the Southern District of New York on Saturday seeking approval to sell trust assets worth about $1.6 billion .
According to the fileAssets held by Genesis, a subsidiary of Digital Currency Group, include shares of Grayscale Bitcoin Trust valued at approximately $1.4 billion, shares of Grayscale Ethereum Trust valued at approximately $165 million, and shares of Grayscale Ethereum Classic Trust worth about $38 million.
The company also filed a separate request to shorten the related deadlines so that the sale request can be heard at the bankruptcy court's next hearing on February 8.
The Federal Reserve signals a delay in cutting interest rates
The BTC price move comes as the broader market digests signals from the US Federal Reserve that a possible interest rate cutting cycle will be delayed until May 2024 or later.
On Sunday, Federal Reserve Chairman Jerome Powell ruled out an earlier rate cut in 2024 in an interview with CBS's 60 Minutes.
Powell said a rate cut in March, as Wall Street expected, was “unlikely.”
“We have said that we want to be more confident that inflation will come down to 2%,” Powell said in the interview. “I think it's unlikely that this committee will reach that level of confidence in time for the March meeting,” which is seven weeks from now.
Bitcoin call options focus on $50,000
However, derivatives market metrics continue to suggest that the bullish sentiment for BTC continues in the medium term. Bitcoin Data on active options ahead of the next month-end expiration date on February 23 shows that the largest group of outstanding contracts are calls with a strike price of $50,000.
According to Deribit, there are over 3,899 contracts outstanding at the strike price of $50,000, with a notional value of over $166 million.
The Bitcoin put call spread for the February month-end expiration shows a concentration of calls at $50,000. Image: Deribit.
In options trading, a call option gives the holder the right, but not the obligation, to purchase the underlying asset at a specific price before or on the expiration date.
The fact that there is a large cohort of call options at $50,000 suggests that a significant number of traders could expect the price of Bitcoin to rise above $50,000 by the end of its expiration date in February. Dollar will rise.
According to Velo Data, the focus of derivatives trading over the past 24 hours has been focused on options to purchase Bitcoin at a lower strike price. Charts from data from multiple exchanges show that the largest group of outstanding contracts are call options priced at $45,000 expiring on February 23.
Volume of active Bitcoin options. Image: Velo Data.
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