Summary
TLDR: Bitcoin’s fall to $61,000 led to a deleveraging event in the futures market, with $5.2 billion in contracts traded. Funding costs for Bitcoin futures rose to 25% but have since fallen to 8%. $90 million in Bitcoin liquidations occurred, with most on OKX and Binance. The market was already leaning long, leading to cascading effects when selling occurred. The recent ruckus may have cleared out potentially precarious leverage.
Key Points
1. Bitcoin’s fall to $61,000 has led to a deleveraging event in the futures market, with a $5.2 billion decline in total value of futures contracts traded on major exchanges.
2. Open interest for Bitcoin futures contracts stood at $28.3 billion on Wednesday, down from a high of $36 billion in March.
3. Funding costs for Bitcoin futures rose to 25% on an annualized basis during the turbulent week but have since fallen to 8%, with $90 million worth of Bitcoin liquidations taking place recently.