The biggest in the world cryptocurrency It has been languishing around $ 47,000, well below early November highs of nearly $ 69,000. A look under the hood helps explain why: Commerce volumes have dried up, futures open interest is plummeting and the number of active addresses has stagnated.
Taken together, the data paints a picture of diminished animal spirits after Bitcoin peaked following the fall launch of the first US futures-tracking exchange-traded funds. Once trusted in the cryptocurrency markets, they have yet to resurface significantly even after a 33% decline. Meanwhile, after billions of Dollars The value of leveraged positions vanished in last month's sudden collapse, new investors have yet to fill the gap.
"There was a lot of leverage in the system in May and then in the lead up to November," said Jim Greco, managing director of Radkl, a cryptocurrency trading firm. "There could be a lot of people who faded away and need to be replaced by new capital."
Trading activity in Bitcoin has been fading as enthusiasm has waned. After a downtrend for months, volume on exchanges registered just $ 4.8 billion on Tuesday, Kaiko data compiled by Messari shows. That's less than the $ 13.1 billion a year earlier and well below the one-year average of roughly $ 9.2 billion.
The volume has not exceeded $ 10 billion since December 4, when the price of Bitcoin plunged more than 20% in a matter of minutes in a display of the currency's notorious weekend volatility. According to data from Coinglass.com, around $ 2.4 billion of cryptocurrency exposure was liquidated, both short-term and long-term.
"We saw a number of US funds, prop stores and hedge funds putting themselves at risk again basically in the latter hours of the year, but this year what we have seen is volumes are relatively down compared to the beginning of last month. ". said Aya Kantorovich, director of institutional coverage for FalconX. "I think what we're seeing is still this question: 'Are we still taking risks or taking risks?'"
The futures market tells a similar story. After hitting an all-time high of $ 17.4 billion at the end of October, open interest in Bitcoin futures contracts on the Chicago Mercantile Exchange is now about $ 10.6 billion, a drop of 39%.
What fueled the run-up was the anticipation of the first US Bitcoin futures ETF, which debuted in mid-October as one of the most traded funds on record. However, the enthusiasm quickly faded: After attracting more than $ 1 billion in just two days, assets under management in the ProShares Bitcoin Strategy ETF amount to $ 1.2 billion.
