Crypto Markets Today: Bitcoin Breaches $98K as Liquidations Top $1.1B

A sharp liquidity crunch sent bitcoin and altcoins plunging, triggering over a billion dollars in derivatives liquidations as traders brace for a potential trend reversal.

• Roughly half the liquidations came from bitcoin positions, with the rest spread across altcoins as selling pressure built up.
• ETH dropped more than 9% over 24 hours while AAVE, JUP and SUI posted double-digit losses. Many tokens slumped to lows not seen for months.
• Zcash and Monero rallied, with ZEC now up more than 1,000% since August in a striking divergence from the broader market.

The crypto market is facing one of its sternest tests yet, with the bitcoin price breaking below the crucial $98,000 level of support following a wave of sell pressure in a low-liquidity environment.

The sell-off prompted more than $1.1 billion in liquidations, about half of which occurred on bitcoin trading pairs, according to CoinGlass.

The altcoin sector performed worse, with ether dropping by 9% in 24 hours while a number of altcoins were dealt double-digit moves to the downside. The CoinDesk 20 Index slid 8% with even the best performing,
losing 3%.

Crypto’s plunge coincided with a sell-off in equities. Nasdaq futures (NQ) lost 2.95% of their value over the past 24 hours.

• Bitcoin’s 30-day implied volatility index, BVIV, which spiked to annualized 50%, during the Asian hours, has fallen back to 47.8% even though the spot price remains near daily lows of around $97,000.
• This suggests that despite the recent sell-off, there is no panic buying of options, indicating a more measured market response.
• Ether’s volatility indexes paint a similar picture.
• Open interest (OI) in futures tied to BTC remains flat while OI in ETH, SOL, XRP, SUI, ADA, LINK, UNI and most other tokens has declined by over 5% in a sign of capital outflows.
• On the CME, ether futures’ premium has dropped to 4.26%, the lowest since April, while BTC remains relatively elevated above 5%. It’s a sign of reduced demand for ETH relative to BTC, even though the ETH price has risen against BTC.
• The market swoon boosted demand for BTC and ETH puts on Deribit. Block flows in BTC featured put spreads and risk reversals. In ETH’s case, put spreads and put diagonal calendar spreads dominated flows.