The market is preparing for crypto winter, with traders and investors inclined to sell digital assets.
The price of Bitcoin (BTC) has been fluctuating between $80,000 and $100,000 for three weeks now. The market has entered a «phase of disappointment» . Experts predict that Bitcoin will continue to move sideways this week.
Crypto exchanges liquidated leveraged trades worth about $451 million from 130,000 traders in one day. Those who expected cryptocurrencies to rise lost $293 million, while those who bet on a decline lost $157 million.
The fear and greed index in the crypto market has once again fallen into the “extreme fear” zone, indicating a score of 20 out of 100. The indicator's downward shift from the “fear” zone suggests that market participants are inclined to actively sell cryptocurrencies.
In the first week of December, spot exchange-traded funds (ETFs) on Bitcoin in the US recorded a net capital outflow of $87.7 million, according to SoSoValue. During this time, $65.6 million was withdrawn from Ethereum funds.
Bitcoin options on Deribit, the largest derivatives trading platform, show that traders are betting that BTC will remain in its current trading range, Bloomberg noted. Open interest in contracts expiring at the end of December far exceeded long-term rates — traders are selling contracts to lock in profits as they expect volatility to remain low.
For the first time in more than a decade, the S&P 500 index's annualized return has exceeded that of Bitcoin. The publication notes that expectations of market growth amid the US cryptocurrency policy are not being met, and traders are preparing for a crypto winter.
