bitcoin (BTC) remained lower on Friday after an overnight bout of volatility sent the biggest cryptocurrency to six-month lows.
The $40,000 optimism unfolds
Hovering around $39,000 at the time of writing, traders were reeling from the sudden drop, which came just as BTC hit multi-day highs above $43,000.
Clearance across all trading venues were therefore, predictably, significant. For Bitcoin and altcoins combined, 24-hour position unwinding totaled $725 million, with BTC positions accounting for $292 million.
The vast majority of casualties were long positions, a sign that the area around $40,000 had drawn considerable confidence as a strong support line.
As Cointelegraph reported, Friday’s options expiration, involving the nearly $600 million open interest, was seen as the main culprit for triggering volatility. In contrast, external triggers such as Russia’s proposed blanket ban on crypto trading and mining seemed to have little or no impact.
“$42.4-42.7K could not continue to hold for Bitcoin, so a nuke to the other side of the region and most likely a continuation to even lower momentum and lower lows -> happened,” said Cointelegraph contributor Michaël van de Poppe. Explain.
That move had been a long time coming, with more conservative analysts predicting an earlier return or even less than $30,000 the whole month of January.
Ether returns to established support
Altcoins, meanwhile, took a noticeably harder hit with the fall of Bitcoin.
Of the top 10 cryptocurrencies by market capitalization, 10% declines were commonplace and rebounds limited, with only Terra (LUNA) limiting losses to less than 5%.