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The crypto market experienced a significant retreat after the listings of spot Bitcoin ETFs, with the market value falling from $1.82 trillion to $1.66 trillion. Altcoins like Ethereum rallied as Bitcoin’s dominance dropped below 50%.
Bitcoin and the DXY Metric
Bitcoin‘s price hovered around $42,500 throughout the week, and investors are anticipating accumulation below $40,000. However, experts predict that the short-term impact of the Bitcoin ETF approval has largely ended. Cryptocurrency trading volumes took a hit due to factors such as volatility, earnings season, and macroeconomic conditions. A strong US dollar is causing selling pressure on Bitcoin. The US Dollar Index (DXY) has rebounded from the level of 101 at the beginning of January to above 103.50.
Nevertheless, data from Coinglass and recent macroeconomic figures indicate that the selling pressure on Bitcoin is gradually easing. Over the last 24 hours, the crypto market saw more than $100 million in liquidations, with 75% of long positions and 25% of short positions being liquidated. Bitcoin recorded $22 million in liquidations, and Ethereum saw $20 million. However, the trend is changing with an increase in open liquidity in the last 12 hours. BTC’s volatility level has dropped to a new low over the past month. Both the main futures RV and IV showed significant declines, with short-term IV falling below 45%.
“The ETF Effect on BTC Is Ending”
According to futures and options data, the short-term effect of the spot Bitcoin ETF has largely ended. The funding rate looks attractive to investors, and buying is expected to start soon. BTC futures and options open interest (OI) have started to rise again in the last 4 hours. BTC OI on exchanges like CME, Binance, and Coinbase is recovering, and the total BTC futures open interest has increased by 0.35% to $18.31 billion.
In contrast, Ethereum’s open interest (OI) has fallen by over 2% in the last 24 hours, bringing the total ETH OI to $8.85 billion. However, Solana and XRP OI are on the rise again, and prices may soon rebound. Popular crypto analyst Crypto Birb noted that Bitcoin’s risk-adjusted returns look promising for the next 12-18 months due to its cyclical nature. If historical patterns hold, holding BTC after its 4th halving and until 2026 could be extremely bullish.
