According to PANews on August 26, The Block reported that Bitcoin fell to around $110,000 on Tuesday, dragging the entire cryptocurrency market down. Impacted by a wave of forced liquidations, the derivatives market has seen intensified volatility, and short-term volatility has surged sharply ahead of the release of key economic data from the U.S. CoinGlass data indicates that over $900 million in leveraged positions have been liquidated in the past 24 hours, with the majority being long positions. Sean Dawson, head of research at Derive.xyz, stated that major cryptocurrencies have had a dismal start this week, with the daily volatility of Bitcoin and Ethereum jumping from 15% and 41% to 38% and 70%, respectively. Recently, the U.S. Producer Price Index exceeded expectations, exacerbating market concerns about macroeconomic factors. Traders sought protection to mitigate risks ahead of the release of U.S. GDP data on August 28 and employment data in early September, driving volatility to surge. The options market is also showing cautious sentiment, with the 25-delta skew turning negative and increased demand for put options, indicating 'the strongest demand for downside protection in two weeks.' Derive's market odds have also shifted towards retesting Bitcoin at $100,000 and Ethereum at $4,000 before the end of September.
The leverage adjustment is not balanced. Glassnode data shows that the total open interest in Bitcoin futures has decreased by 2.6%, while the long funding rate has increased by 29%. Timothy Misir, head of research at BRN, believes that the market downturn is due to the liquidation of leveraged funds. If Bitcoin cannot maintain around $110,000, the technical indicators will show 'weakness'; the key price levels are around $103,700 and $100,800, and breaching these levels will 'jeopardize the bull market structure'; however, corporate funds and Wall Street have shown selective bottom-fishing behavior amid market volatility.
