Pain for Bitcoin and altcoin investors alike as a fresh cascade sees $40,000 support disappear.
Bitcoin (BTC) stayed lower on Friday after an overnight bout of volatility sent the largest cryptocurrency to six-month lows.
$40,000 optimism unwinds
Circling $39,000 at the time of writing, traders were reeling from the sudden downside, which came just as BTC had hit multi-day highs, passing $43,000.
Liquidations across trading platforms were thus predictably significant. For Bitcoin and altcoins combined, 24-hour position unraveling totaled $725 million, with BTC positions accounting for $292 million.
The vast majority of the casualties were long positions, a sign that the area around $40,000 had attracted considerable faith as a solid support line.
As Cointelegraph reported, Friday’s options expiry, involving the open interest of nearly $600 million, was considered the main culprit for sparking the volatility. By contrast, outside triggers such as Russia’s proposed blanket ban on crypto trading and mining appeared to have little to no impact.
“$42.4-42.7K couldn’t continue to hold for Bitcoin, so a nuke towards the other side of the region and, most likely, continuation towards even further downwards momentum and lower lows -> happened,” Cointelegraph contributor Michaël van de Poppe explained.
The move had been long in coming, with more conservative analysts predicting a return closer to or even below $30,000 throughout January.
Ethereum returns to established support
Altcoins, meanwhile, took a noticeably harsher hit as Bitcoin fell.
Out of the top ten cryptocurrencies by market cap, 10% drops were commonplace and rebounds limited, with only Terra (LUNA) reining in losses to under 5%.