Bitcoin reclaimed around half of the losses registered during Thursday's crypto market meltdown, which was the largest since the collapse of Sam Bankman-Fried's FTX exchange roiled the digital asset sector more than three years ago.
The world's largest cryptocurrency fell as much 14% yesterday, dragging the token down more than 50% from its October peak. Bitcoin rose as much as 7.2% to $67,623 on Friday. Earlier in the session, it came close to falling below $60,000 for the first time since October 2024.
Other, smaller, less-liquid tokens also rebounded. Ether rose 5.1%, while Solana climbed about 4.5% after at one point being down 14% on Thursday. Bitcoin accounts for almost 60% of the $2.3 trillion crypto market's value.
Cryptocurrencies have been on shaky ground ever since a brutal series of liquidations in October that sapped market confidence. The selling picked up steam this week in line with the unwinding of leveraged bets and broader market turbulence.
Bitcoin's drop from all-time highs appears to be “driven more by indiscriminate positioning unwinds than a clear fundamental catalyst,” said Re7 Capital founder Evgeny Gokhberg. “Market flows suggest potential hedge fund deleveraging, including stress around basis trades, implying the decline may be structural rather than fundamental.”
The bounce back from $60,000 suggests there's “strong support there,” said Damien Loh, chief investment officer at Ericsenz Capital. Still, traders shouldn't “expect a sharp rally back up” as sentiment remains cautious, he added
Choppy trading in the past 48-hours underscores a sharp rise in volatility.
The Bitcoin Volmex Implied Volatility Index — designed to reflect the market's expected 30-day volatility of Bitcoin, and derived from real-time crypto options prices — surged to over 97% from 57% on Thursday.
“Bitcoin volatility has doubled from last week,” said Pratik Kala, head of research at Apollo Crypto, a digital-assets hedge fund. “Players like us and others have realized that this is a ‘blood on the streets' moment and are bidding.”
About $2.1 billion of bullish bets across all cryptocurrencies were liquidated in the past 24 hours, according to CoinGlass data.
Bitcoin hoarders are among those feeling the pinch. In an earnings announcement Thursday, Michael Saylor's Strategy Inc. confirmed a net loss of $12.4 billion for the fourth quarter, driven by the mark-to-market decline in its vast holdings. Still, shares of Strategy jumped around 10% on Friday with Bitcoin rallying.
Meanwhile, investors pulled $434 million from US exchange-traded funds for Bitcoin on Thursday.
Traders are now focused on whether Bitcoin can hold $60,000, said Rachael Lucas, an analyst at BTC Markets. A failure to do so “could see downside in the mid-$50,000” range, she added.
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