Bitcoin (BTC) Faces Another Monthly Futures Expiration
Bitcoin (BTC) faces another expiration of monthly options and futures, which may affect price actions ahead of the weekend. Futures expiration usually leads to a price battle of positions, which may leave some of the holders at a disadvantage.
BTC held above $21,117.03 ahead of the weekend, pressured by further expectations of another drop to the $17K range. The current price also shows smaller leverage and more cautious trading.
The overall trading attitude remains bearish, though with some expectations of a fast rally. For most buyers, the expectation is that BTC may keep to the low side of the range for months. Changpeng “CZ” Zhao, CEO of the Binance group, put his expectations for BTC lows between three months and years.
Zhao also tentatively suggested the current lows resemble historical market opportunities, without claiming to give financial advice.
Based on the Rainbow Chart, BTC is still in the fire sale range, though raising doubts of measuring the future potential in case the price breaks below the chart’s predictive range.
BTC Gets Added to Avalanche
BTC can now be bridged directly to the Avalanche ecosystem, through a new wallet-like tool, Core. The Core tool offers swaps and movement of funds between DeFi protocols, as well as decentralized swaps.
Avalanche managed to survive the recent DeFi deleveraging, while also growing its Web3 ecosystem. The news also helped AVAX rise to $17.31 in a short round of recovery.
BTC may be used as a more secure collateral, as well as a tool for payments on a cheaper network. Avalanche C-Chain is becoming one of the easier tools for decentralized access. The Core feature means BTC can be bridged with fewer transactions. BTC has been used as collateral, leading to demand for secure bridges.
Avalanche holds more than $2.66B through various protocols, with most weight in Aave, split through various assets with more significant stability.
Is BTC Near Lows
There is no exact way to predict BTC lows, but panic selling or liquidations could lead the price lower. In the short term, BTC is seen as backtracking again under $20K, with another dip to $17K seen as a feasible scenario.
But the capitulation may be reaching its end, with panic-sellers realizing losses. There are additional signs of whale buying and outflows from exchanges.
Tether Continues to Burn Supply
USDT tokens are now below 67B after another supply burn. A total of 66.97B tokens is in circulation, with a sinking daily trading volume of $42B.
BTC volumes have also slowed down from their usual range, down to $24B in 24 hours. For a while now, USDT has a slower turnover of only 75% of its supply. During peak times, the whole supply of USDT moved more than once through trading.
Despite the sinking BTC price, USDT is not on a printing spree, instead rapidly burning its excess supply. While Tether, Inc. and IFinex remain non-transparent, there are hopes the organization has accrued enough assets during the bull market to make USDT solvent.
Token burns are also listed as being sent to Bitfinex by bot trackers.
At the same time, USDT is still active in flows between exchanges and wallets.
Three Arrows Capital Still Creates Problems
The exact extent of loans made to the 3AC hedge fund remains unknown, with the potential for more exposure to large-scale loans.
Currently, the liquidations on most DeFi projects have stopped, though there is still a threat in the case of a price downturn.
So far, the loan contagion in crypto space has not ended, instead extending more credit lines while keeping users waiting. Fears of new attacks see risk for Solana, which is the easiest to bring down to liquidation levels.
But the TRON DAO is also exposed to collateralized loans. Additionally, the biggest fear remains USDT, which may de-peg more deeply and affect the market across the board.
In addition to the overall market chaos, Celsius (CEL) now trades at $0.95, adding another 79% in the past week. CEL is highly volatile and facing a short squeeze to attack short leveraged positions.
Total DeFi value is now down to $39B, propped up by the stabilized Ethereum (ETH) market prices of around $1,000. But the sector is more risk-averse now, as the actual source of value becomes known. Additional panic is added by rumors of 3AC being even less solvent, using loans to buy yachts.
The current rounds of liquidations affecting Terra and Celsius are much greater in scale compared to previous ICO rug pulls or scams, erasing close to $60B in notional value. DeFi space itself has lost more than $70B in notional value since its peak.
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