Bitcoin (BTC) stayed lower on Friday after an overnight bout of volatility sent the largest cryptocurrency to six-month lows.

Bitcoin

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

$40,000 optimism unwinds

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reversing at $38,250 after shedding over $4,000 in hours.

Circling $39,000 at the time of writing, traders were reeling from the sudden downside, which came just as BTC had hit multi-day highs, passing $43,000.

Liquidations across trading platforms were thus predictably significant. For Bitcoin and altcoins combined, 24-hour position unraveling totaled $725 million, with BTC positions accounting for $292 million.

The vast majority of the casualties were long positions, a sign that the area around $40,000 had attracted considerable faith as a solid support line.

Chart

Crypto liquidations chart. Source: Coinglass

As Cointelegraph reported, Friday’s options expiry, involving the open interest of nearly $600 million, was considered the main culprit for sparking the volatility. By contrast, outside triggers such as Russia’s proposed blanket ban on crypto trading and mining appeared to have little to no impact.

“$42.4-42.7K couldn’t continue to hold for Bitcoin, so a nuke towards the other side of the region and, most likely, continuation towards even further downwards momentum and lower lows -> happened,” Cointelegraph contributor Michaël van de Poppe explained.

The move had been long in coming, with more conservative analysts predicting a return closer to or even below $30,000 throughout January.

Ether returns to established support

Altcoins, meanwhile, took a noticeably harsher hit as Bitcoin fell.

Out of the top 10 cryptocurrencies by market capitalization, 10% drops were commonplace and rebounds limited, with only Terra (LUNA) reining in losses to under 5%.

Ether (ETH) fell to crucial support around $2,800, the site of an all-time high from last April, to cap weekly losses approaching 15%.

ETHUSD

ETH/USD 1-hour candle chart (Bitstamp). Source: TradingView


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Recommended content


Recommended Content

Editors’ Picks

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.

More Altcoin News
Shanghai court confirms legal recognition of crypto ownership

Shanghai court confirms legal recognition of crypto ownership

A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.

More Cryptocurrencies News
BTC hits an all-time high above $97,850, inches away from the $100K mark

BTC hits an all-time high above $97,850, inches away from the $100K mark

Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: New high of $100K or correction to $78K?

Bitcoin: New high of $100K or correction to $78K?

Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP