Crypto Market Faces Fragile Recovery After $500B Value Loss
Crypto Market Overview
- The crypto market is recovering after a flash crash erased over $500 billion, causing nearly $20 billion in liquidations. Bitcoin dropped 13% but rebounded to trade above $111,800.
- The CoinDesk 20 Index rose 11.8% from the week's low but fell 3.5% in the last 24 hours.
- Wintermute highlighted synchronized sell-offs testing trading platforms' limits, with liquidity quickly recovering post-drawdown.
- Sam MacPherson noted that blue-chip collateral stabilized the DeFi infrastructure during market turmoil.
Institutional Moves
- Citi plans to launch crypto custody services in 2026, reflecting Wall Street's interest in digital assets.
- China Renaissance is raising $600 million for a BNB-focused investment vehicle with YZi Labs.
- Crypto investment products saw $3.1 billion net inflows last week, though spot Bitcoin ETFs experienced $326 million outflows.
Market Sentiment and Derivatives
- BTC futures market stabilizes with open interest at $25.5 billion; Bybit's funding rate turned negative at -5%, indicating mixed sentiment.
- BTC options market shows bullish acceleration; Put/Call Volume balanced, and 1-week 25 Delta Skew spiked to 12.62%.
- Total liquidations reached $627 million, with ETH and BTC leading.
Token Movements and Technical Analysis
- Plasma (XPL) fell by 13.5%, extending losses amid skepticism over tokenomics and large allocations.
- TAO showed strong performance, reclaiming the 50-week EMA, with traders watching for a close above $390 for bullish continuation.
Economic Indicators and Equities
- Gold and silver futures up slightly; major stock indices show mixed performance.
- Crypto equities like Coinbase and Galaxy Digital showed pre-market declines despite prior gains.
ETF Flows
- Spot BTC ETFs saw daily net outflow of $326.4 million, while Spot ETH ETFs had $428.5 million outflows.
Upcoming Events
- Swellchain undergoing an upgrade; dYdX Foundation hosting an analyst call; Orca discussing new staking token.
- Federal Reserve Chair Jerome Powell speaking at NABE meeting.
Additional Developments
- Ethereum's Fusaka upgrade rolls out on Sepolia; mainnet launch date pending.
- Societe Generale-FORGE partners with Bitpanda to offer regulated stablecoins in DeFi.