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By James Van Straten, Omkar Godbole|Edited by Sheldon Reback
Jan 28, 2025, 10:47 a.m. UTC
What to know:
- Many metrics signaled a local bottom in the bitcoin price during Monday’s slide.
- Funding rates went negative and U.S.-listed ETFs experienced their first outflows since mid-January.
Short-term bitcoin (BTC) holders exited the market at a loss Monday as tumbling prices also saw derivative traders throw in the towel, leading to a significant decline in open futures bets on the Chicago Mercantile Exchange.
Short-term holders, defined by Glassnode as addresses with a history of holding coins for less than 155 days, sent over 21,000 BTC ($2.2 billion) to exchanges at a loss as the largest cryptocurrency fell as much as 4.7%, the most in two weeks, according to CoinDesk Indexes pricing.
The transfer to exchanges, often a precursor to sales, was the second-biggest this month and may reflect that purchasers who’d bought when the price was near record highs around $108,000 toward the start of the year were spooked by the sudden slide back into the five digits.
These addresses, owned by active traders, new entrants and weak hands, tend to be sensitive to price gyrations and often succumb when prices slide. BTC fell to under $98,000 as the weekend release of the Chinese startup DeepSeek challenged U.S. leadership in AI and technology.
Other corners of the market also hinted at capitulation, often observed at local price bottoms. For instance, the perpetual funding rates for BTC flipped negative, a sign of stronger demand for bearish bets. That’s usually when bitcoin reaches a low such as on Jan. 13, when bitcoin dipped below $90,000 and Aug. 5, during the yen carry trade unwind.
The de-risking also happened on the Chicago Mercantile Exchange, a proxy for institutional activity, which saw the biggest notional drop in open interest (OI) alongside a double-digit slide in chipmaker Nvidia (NVDA). Notional bitcoin OI fell a record $2.4 billion (17,000 in BTC terms), driving the basis lower, according to Glassnode data.
U.S. listed bitcoin exchange-traded funds (ETFs) saw a massive outflow of $457.6 million. A similar outflow occurred Jan. 13, according to Farside data.
James Van Straten is a Senior Analyst at CoinDesk, specializing in Bitcoin and its interplay with the macroeconomic environment. Previously, James worked as a Research Analyst at Saidler & Co., a Swiss hedge fund, where he developed expertise in on-chain analytics. His work focuses on monitoring flows to analyze Bitcoin’s role within the broader financial system.
In addition to his professional endeavors, James serves as an advisor to Coinsilium, a UK publicly traded company, where he provides guidance on their Bitcoin treasury strategy. He also holds investments in Bitcoin, MicroStrategy (MSTR), and Semler Scientific (SMLR).
Omkar Godbole is a Co-Managing Editor on CoinDesk’s Markets team based in Mumbai, holds a masters degree in Finance and a Chartered Market Technician (CMT) member. Omkar previously worked at FXStreet, writing research on currency markets and as fundamental analyst at currency and commodities desk at Mumbai-based brokerage houses. Omkar holds small amounts of bitcoin, ether, BitTorrent, tron and dot.
