Bitcoin dropped to a new six-week low of slightly over $81.3K in the last hour or so.
The most obvious cause of this recent disaster is probably growing concerns about a possible American attack on Iran.
CoinGlass data indicates that 273,244 traders were liquidated in the last day, totaling $1.70 billion.
The biggest liquidation order ever occurred on HTX, worth $81 million in BTC-USDT.
The correction was primarily brought about by shifts in Washington policy, such as President Donald Trump’s announcement on Friday that he would select his next nominee for Federal Reserve Chairman.
President Trump is expected to nominate Kevin Warsh, a current professor at Stanford University and former governor of the Federal Reserve from 2006 to 2011.
Warsh has been an outspoken critic of recent Fed policies and supports Trump’s desire for much lower interest rates.
After a screening process that reduced candidates to a shortlist that included Warsh, National Economic Council Director Kevin Hassett, Fed Governor Christopher Waller, and BlackRock executive Rick Rieder, Warsh met with Trump at the White House on Thursday. According to people familiar with the process, Warsh was the front-runner.
This announcement elevated persistent market turbulence and a recent correction, partly caused by uncertainty about the Fed’s future course under Trump. Powell has been under fire from Trump on several occasions for not lowering interest rates sufficiently
Panic in the crypto market elevated amid the resurgence of geopolitical tensions in the Middle East. Bitcoin Options Expiry The put/call ratio for this week’s large batch of Bitcoin options contracts is 0.54, which indicates that there are more expiring calls (longs) than puts (shorts).
The U.S President had also sent the Abraham Lincoln Carrier Strike Group to the Middle East after cautioning that Iran’s window of opportunity to reach an agreement is “running out.”
Coinglass data also highlighted that the maximum pain is about $90,000, which is higher than the current spot prices; so many will lose money when it expires. The value or quantity of Bitcoin options contracts that have not yet expired, known as open interest (OI), is still at its highest level at $100,000, with $1.9 billion at this strike price on Deribit.
US crude oil surged by more than 2.5 percent, while the global benchmark Brent increased by 2.3 percent to almost $70. However, gold fell from its most recent all-time high above $5,500/oz to $5,100 in a single day. Approximately 91,000 Bitcoin options contracts will expire on Friday, January.
The cryptocurrency market has lost about $250 billion since the beginning of the year, as the Federal Reserve kept US interest rates steady at 3.5 percent to 3.75 percent, still higher than its 2 percent target.
Option traders bet more downsides for BitcoinÂ
There is still more than $1 billion in OI at $75,000, $80,000, and $85,000 as bearish bets increase.  The total BTC options OI across all exchanges has increased, reaching $58 billion since the start of the year
There has been a sharp rise in Bitcoin’s open interest since Wednesday, which is the total number of open positions. Options market investors are betting on a short-term crash to the $70,000 to $75,000 range, which hovers at -12 percent, indicating investors are paying a premium for downside protection.
In the same time frame, both futures and spot cumulative volume delta declined, indicating that selling pressure from both spot and perpetual investors was the primary cause of Bitcoin’s decline. In general, the markets expect a challenging start to February.
