Review of a “Big Wind” week on the crypto market
Over the past week, the crypto market has taken a catastrophic slump as leveraged long positions have been squeezed. Meanwhile, JP Morgan is forecasting another market-wide retreat and Cardano is beginning its smart contract era.
The crypto market has had a rough week with large-cap investments posting double-digit losses. Bitcoin ended the week -10% trading around $ 45,100 while Ethereum was down 15% and trading near $ 3,300.
BTC / USDT. Source: TradingView
Last week there was also one of the biggest kills since the May crash. The total open interest (OI) of BTC and ETH futures and options contracts has increased since July when traders wanted to capitalize on the market euphoria. Whales saw the market overstretch and triggered a wide-ranging attack.
In such cases, whales will massacre the market by creating selling pressure that pushes long positions down. Last Tuesday, panicked traders were forced to sell tokens at a discount as their positions began to bleed due to the drop in prices. Wal is enjoying a rich season with cheap tokens.
More than 50% of all July open interest was wiped out last week. On September 7, $ 1.2 billion of Bitcoin positions were liquidated, most of them long positions. Skew reports that the total amount of liquidation in the markets could be around $ 2.1 billion.
Other large-cap crypto assets aren’t as simple as Solana alone, growing 6.9% over the week. Dogecoin is the biggest loser in the top 10 and has fallen more than 25% in the past seven days.
Top 10 cryptos in the last seven days. Source: Coinecko
Some analysts suggest that this week’s bear market was due to too many retailers and weak hands in cryptocurrencies.
Wall Street giant JP Morgan last week warned of “retail investor frenzy and euphoria” in the digital asset market. Nikolaos Panigirtzoglou, CEO of JP Morgan, says retail markets pushed the value of lower cap altcoins to an all-time high last month, and that this pushed Bitcoin’s market share to a low point in historical terms.
He cited the surge in altcoin (cryptocurrency trading excluding bitcoin) trading, which now accounts for about 33% of the crypto asset market, a sharp increase from 22% in early August.
JP Morgan CEO highlighted Solana, Cardano and Binance Coin as potentially overbought assets. Comparing the uptrend of the market to the uptrend from January to mid-May 2021, he found that the prices of assets like Ethereum and BNB have more than halved since peaking in May in the second and third weeks of July, while the ETH price fell from $ 4,183 to a low of $ 1,795.
Last week, the Central American country El Salvador became the first country to accept Bitcoin as a legal currency. Meanwhile, neighboring Mexico has crushed all rumors that it could do the same. On Thursday, the Governor of the Central Bank of Mexico, Alejandro Diaz de Leon Carrillo, said Bitcoin was more of a medium of exchange than an evolved form of fiat currency.
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According to Bravenewcoin