Institutional Investors Snapped Up Bitcoin Amid Sharp Decline Beneath $50,000 Threshold

<div id="">
  <p>Despite the recent tumultuous conditions in the cryptocurrency market, leading to substantial <a target="_blank" href="https://cryptoslate.com/insights/leveraged-short-positions-close-to-1-billion-liquidation-as-bitcoin-climbs/">liquidations worth billions</a>, optimism seems undiminished among <a target="_blank" href="https://cryptoslate.com/coins/bitcoin/">Bitcoin</a> options traders according to a Bloomberg News <a target="_blank" href="https://www.bnnbloomberg.ca/business/company-news/2024/08/06/hedge-funds-pile-back-into-crypto-call-options-after-horrific-liquidations/">report</a>.</p>
  <p>Amid global economic uncertainties and regional geopolitical tensions, Bitcoin's value plunged to $48,818 on Aug. 5, a nadir unseen since February. Nevertheless, as the cryptocurrency's value dipped, <a target="_blank" href="https://cryptoslate.com/insights/jp-morgan-points-to-institutional-bitcoin-optimism-for-resilient-market/">institutional interest spiked</a>, resulting in purchasing activity.</p>
  <p>Offshore exchanges and American OTC (over-the-counter) desks have noted an uptick in call options acquisitions, with strikes set at $90,000 or above for Bitcoin by the end of the year.</p>
  <p>August 4 witnessed a massive clearance of crypto positions, with liquidations topping $1.1 billion. Both Bitcoin and Ethereum suffered drastic drops during the Asia trade segment, tumbling by 17% and over 20%, respectively. However, as of Aug. 6, the tide seems to be turning, with the market showing signs of recovery as buying activity intensifies, particularly below the $50,000 mark.</p>
  <p>The recovery narrative continues as, by Aug. 8, Bitcoin had surged to $59,350, marking an 8.31% rise in just 24 hours, as per reports from <em>CryptoSlate</em>.</p>
  <h2>The Institutional Response to Price Drops</h2>
  <p>SwapGlobal's Yevgeniy Feldman indicated that the recent market downturn saw a clearance of almost half of the open interest in crypto derivatives. He noted that devastating liquidation of long positions occurred, with hedge funds and institutional buyers resorting to bullish bets on Solana and Bitcoin via call spreads once the event passed.</p>
  <p>Feldman also mentioned that Bitcoin's resurgence is partly attributable to increased interest on Coinbase. He highlighted the significant bid-to-offer ratio, pointing to a substantial volume of buyers poised at $49,000 or lower.</p>
  <h2>Short-Term Market Insights</h2>
  <p>Recent activity on offshore exchanges indicates a spike in short-term protective measures against further price declines. The put-to-call ratio on platforms like Deribit has gone up, with puts being a more common purchase than calls in the past day.</p>
  <p>Retail investors on such platforms tend to employ greater hedging strategies through options than U.S.-based institutions, which are more likely to maintain substantial Bitcoin assets and utilize OTC desks. This observation aligns with comments made by FalconX's head of markets, Ravi Doshi, to Bloomberg.</p>
  <blockquote>
    <p>He explained that short-term market predictions lean toward puts, but the bias shifts to calls when looking beyond imminent events such as elections. Despite recent volatility, the second half of the year holds bullish sentiment for Bitcoin, continuing a year-long trend. Doshi called attention to the substantial open interest in September $90,000, December $100,000, and March $100,000 call options, which together account for nearly $1 billion in notional value.</p>
  </blockquote>
  <div class="price-watch-coins">
    <div class="price-watch-coin clearfix">
      <h6>Bitcoin Market Data</h6>
      <p>As of <span class="press">8:15 pm UTC on Aug. 8, 2024</span>, Bitcoin is the top-ranked cryptocurrency by market cap, and the price has <strong>increased by <span class="text-number">8.23%</span></strong> in the past 24 hours. Its market capitalization stands at <strong>$1.18 trillion</strong>, with a trading volume of <strong>$41.48 billion</strong> over the same period. <a target="_blank" href="https://cryptoslate.com/coins/bitcoin/" title="Bitcoin">More about Bitcoin ›</a></p>
      <div class="price-watch-section">
        <h6>Crypto Market Summary</h6>
        <p>At the time noted above, the total valuation of the crypto market is <strong>$2.09 trillion</strong>, with a 24-hour trading volume of <strong>$94.54 billion</strong>. Bitcoin's market dominance is <strong>56.24%</strong>. <a target="_blank" href="https://cryptoslate.com/coins/">Discover more about the crypto market ›</a></p>
      </div>
    </div>
  </div>
  <h6>Articles Referenced</h6>
  <div class="related-articles featured list-feed">
    <h6>Most Recent <span>Alpha</span> Market Analysis</h6>
  </div>
</div>

This rewrite maintains all key points and HTML structure, but in more concise, modern language.

Source link

#Institutional #investors #bought #dip #Bitcoins #steep #crash