Shortly after the options expired, the cryptocurrency market enjoyed a much-needed rebound, with the market valuation reaching $1.62 trillion. A low put-call ratio and other favorable indicators encouraged traders to purchase Bitcoin and Ethereum, which led to a shift in price that resulted in a comeback and continued optimism on Saturday.
Today, the Crypto Market Fear and Greed Index increased sharply, from 49 (neutral) to 55 (neutral), suggesting rapid shifts in public opinion.
Why Is Today’s Crypto Market Up?
The cryptocurrency market witnessed a major liquidation of shorts following a $5.8 billion Bitcoin and Ethereum options expiry. This was caused by a number of variables, including technical indications, liquidations, and macro.
In the past 24 hours, the cryptocurrency market has liquidated almost $120 million, with nearly $90 million going to short sellers. According to liquidation statistics, short positions in bitcoin valued more than $40 million were cleared. In the previous 24 hours, over 40K traders were liquidated, with the largest single liquidation order valued at $2.53 million on Binance’s ETHUSDT.
In the past day, there was a significant liquidation of short positions in SOL, SUI, ORDI, TRB, MANTA, CFX, ALT, and XRP, excluding Bitcoin and Ethereum. SUI is up 21%, MANTA is up 15%, and CFX is up 18% as a result.
Why BTC and ETH Are Rising
Bitcoin and Ethereum futures and options open interest shoot massively after the expiry, with major buying from the U.S. crypto market. Traders turned bullish after the Federal Reserve’s preferred inflation metric US PCE cooled to 2.9%, lower than the market expectations of 3%.
BTC futures open interests on CME jumped 9% to $17.97 billion in the last 24 hours and over 4% in last 4 hours. Binance, Bybit, Coinbase, and Kraken also saw similar data. Total BTC futures open interest increased more than 3% over the last 24 hours.
Total ETH futures open interest has climbed just 0.60% to $7.87 billion in the past 24 hours. However, data indicates US traders are actively bullish.
The US 10-year Treasury (US10Y) slips to 4.13% from six-week highs of 4.16% and US dollar index (DXY) moving near 103.50 after the key economic data. The recent macro data confirmed that the Fed is likely to keep the policy rate steady in the 5.25%-5.50% range in the FOMC interest rate decision on Jan 31.
BTC price jumped 5% in the past 24 hours, with the price currently trading at $41,717. The 24-hour low and high are $39,902 and $42,209, respectively. Furthermore, the trading volume has increased by 40% in the last 24 hours, indicating a rise in interest among traders.
ETH price trades at $2,265, up 3% in the last 24 hours. The 24-hour low and high are $2,196 and $2,282, respectively.
