Bitcoin’s decline intensified further in Friday’s Asian trading session as traders reversed their previous bets following the election of US President Donald Trump, falling by 25% from its record high set less than six weeks ago.
At 10:13 a.m. Singapore time, the token dropped 2.6% to $82,220, hitting its lowest level since November 11. This decline was part of a broader sell-off in cryptocurrencies: Ether, Solana and XRP have also fallen sharply in recent days.
This sell-off highlights the rapid changes in the fate of digital assets, which flourished after Trump’s election victory. On January 20, the day of Trump’s inauguration, Bitcoin hit a record high of $109,241. However, since then, the price of Bitcoin has been on a downward trend due to concerns over the president’s combative stance and general worries about the US economy.
Stefan von Haenisch, the head of over-the-counter trading for Bitgo, a cryptocurrency custodian company in the Asia-Pacific region, said, “Given the macro environment, our current situation is not surprising.” He added that traders are still waiting for Trump (who is generally believed to support cryptocurrencies) to propose specific measures for the industry, including Bitcoin reserves.
Cryptocurrencies are also under pressure from a shift in investor risk appetite, with investors pulling back from Trump trades across multiple markets. Poor U.S. consumer confidence data has raised questions about the economic outlook, causing the S&P 500 index to fall this week.
According to data from Deribit, the largest cryptocurrency options exchange, the open interest of put options with an exercise price of $70,000 is the second highest among all contracts expiring on February 28. A total of $4.9 billion in open interest will expire on Friday.
According to data compiled by Coinglass, the liquidation of long and short positions in cryptocurrencies accelerated on Wednesday. By around 3:30 p.m. New York time, about $425 million worth of positions were liquidated in just four hours. Over the past three days, more than $2 billion in bullish bets have been liquidated. Bitcoin perpetual futures are one of the most common ways for offshore investors to increase leverage, and during this period, long positions have dropped sharply.
“This is a mixture of spot selling and basis unwinding,” said Bohan Jiang, head of over-the-counter options trading at Abra. “In my view, almost all of this capital comes from the outflow of ETF spot from directional traders.”
On Tuesday, investors withdrew over $1 billion from spot Bitcoin ETFs, marking the largest outflow since the debut of such ETFs in January last year. The Fidelity Wise Origin Bitcoin Fund (FBTC) saw the largest outflow, followed by the iShares Bitcoin Trust ETF (IBIT) from BlackRock. ETFs that directly hold Ether also experienced a smaller outflow of $130 million.
Ethereum, in particular, has been hit hard by the Bybit incident, intensifying its volatility, said Newhouse. “Solana itself is giving up the gains it made over the past few months due to the memecoin hype.”
