Bitcoin dropped sharply on Thursday, breaking an important support level and triggering a liquidation wave in the derivatives market.
The sales are known to have been triggered by a Wall Street Journal article that revealed that SpaceX reduced the value of its BTC holdings by $373 million in 2021 and 2022.
QCP Capital, a cryptocurrency analysis firm, stated in its report that this breakout was due to large BTC and ETH gamma-linked options liquidations on Deribit and OKX. Gamma is defined as a measure of how much the price of an option has changed in response to a change in the price of the underlying asset.
QCP Capital also said that the derivatives market is in bear expansion mode, meaning that traders expect further declines for Bitcoin and other cryptocurrencies. The firm noted that Bitcoin perpetual transactions funding is at its most negative level in six months, indicating that short traders are paying long traders large sums to keep their positions open.
Eyes on Powell's Speech and Grayscale Litigation
QCP Capital said the new moves now largely depend on the speech that Federal Reserve Chairman Jerome Powell will deliver in Jackson Hole next week. The talk will take place on Friday, August 25. In addition, the decision in the case between the SEC and Grayscale is expected to be announced on Tuesday or Friday.
*Not investment advice.
