Ethereum Leverage Elevated Despite Long Squeeze, Glassnode Says

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The on-chain analytics firm Glassnode has revealed how the Ethereum futures market is still overheated despite the long squeeze that just occurred.

Ethereum Open Interest Still Notably Above The Yearly Average

In a new post on X, Glassnode has discussed about how the Ethereum futures market has changed during the past day. ETH, like other digital assets, has witnessed significant volatility inside this window. Sharp price action usually means chaos for the derivatives side of the sector and indeed, a large amount of liquidations have piled up on the various exchanges.

Given that the price action has been majorly towards the downside for Ethereum, the long investors would be the most heavily affected. Below is the chart shared by the analytics firm that shows the trend in the long liquidations related to ETH over the past year.

From the graph, it’s visible that the Ethereum futures market has just witnessed a massive amount of long liquidations. “Yesterday, $76.4M in ETH long liquidations hit the market, with $55.8M wiped out in a single hour – the second-largest spike in a year, just behind Dec 9’s $56M,” notes Glassnode.

These liquidations have meant that a notable ETH leverage flush-out has occurred on the derivatives platforms. Here is another chart, this time for the Open Interest, which showcases the market deleveraging:

The “Open Interest” is an indicator that keeps track of the total amount of Ethereum-related futures positions that are open on all centralized derivatives exchanges. At the start of the month, this metric was sitting around $20.5 billion, but after the mass liquidation event, its value has come down to $15.9 billion.

This suggests $4.6 billion in positions have been wiped out from the market. While this represents a large decrease, it has actually not been enough to cause a sufficient cooldown in the Open Interest.

As displayed in the above chart, the 365-day moving average (MA) of the Ethereum Open Interest is currently situated at $13 billion. Thus, the metric’s daily value is around 22% higher than the average for the past year.

This could be a potential indication that the leverage in the sector is still at elevated levels, despite the massive amount of liquidations that the long investors have suffered.

Historically, an overheated futures market has generally unwound with volatility for the coin’s price, so it’s possible that more sharp action could follow for ETH in the near future.

ETH Price

Ethereum saw a crash towards the $2,100 mark yesterday, but it would appear the cryptocurrency has seen a rebound as its price is now trading around $2,800.

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Bitcoin Risks Losing the $90K- $110K Range as These 3 Development Could Put the Brakes on the Next Bull Breakout

CoinDesk

Since early 2023, Bitcoin has chalked out a classic stairstep bull run, characterized by incremental price increases followed by periods of consolidation that set the stage for the next move higher.

The cryptocurrency's ongoing price consolidation between $90,000 and $100,000 is the third of the broader bull run from $20,000. The consensus is that it will end in a bull breakout, just as those in mid-2024 and 2023 did.

However, the following three developments, suggest otherwise.

Tightening USD liquidity

If there's one thing that any asset class, not just crypto, typically dislikes, it's the tightening of fiat liquidity, particularly the global reserve currency, the U.S. Dollar (USD). To the dismay of BTC bulls, the dollar liquidity is tightening due to several factors, as Arthur Hayes, chief investment officer at Maelstrom, noted on X.

Notably, the USD cash balance held in the Treasury General Account (TGA), the U.S. government's checking account at the Fed, has increased from $623 billion to $800 billion in four weeks, according to data source MacroMicro.

After the U.S. hit its self-imposed debt limit of $36 trillion last month, markets hoped that the Treasury would run down the TGA balance as part of extraordinary measures to keep the government functioning, inadvertently enhancing liquidity in the economy and markets. That's what the Treasury did during the previous debt ceiling issue of early 2023, spurring increased risk-taking in equity and crypto markets.

"We're looking at a scenario where key liquidity sources are drying up or being more tightly controlled. This could lead to a slowdown in economic activity, higher borrowing costs, and potentially a more challenging environment for risk assets, including crypto," Anddy Lian, thought leader and intergovernmental blockchain expert, said on X.

Trump administration to 'evaluate' strategic BTC reserve

Since President Donald Trump took office on Jan. 20, he has been actively following through on various campaign promises related to tariffs, illegal migrants and international affairs.

But, there is one notable exception: the establishment of a strategic BTC reserve. It was a significant catalyst behind BTC's surge from $70,000 to over $100,000.

The Trump administration seems to be more cautious, opting to "evaluate" the feasibility of creating such a reserve. It's a disappointing shift for crypto investors anticipating swift action on this initiative, similar to Trump's quick responses on other issues.

"Wait, Trump said he would do a $BTC Reserve, not promise to 'evaluate it.' Evaluate/Study is what Washington does when they don't want to do something," Jim Bianco, president and macro strategist at Bianco Research, LLC, said.

BTC fell from over $100,000 to $96,000 during the overnight trade after Trump's crypto Czar told CNBC that a top agenda item for his new task force is evaluating the feasibility of a bitcoin reserve.

Reappearance of a 2021 topping pattern

Finally, those looking at technical charts to gauge the next move might want to pull up the 14-week relative strength index (RSI) on their screens.

That's because the oscillator has recently diverged bearishly in a move that marked the 2021 top. A bearish RSI divergence contradicts the higher high in prices, signaling a slowdown in the bullish momentum.

The RSI has produced a lower high relative to its December high, diverging bearishly from the continued price uptrend. That's similar to the 2021 pattern.

The negative setup would be invalidated should the RSI cross above the falling trendline, representing the divergence, indicating a renewed bullish momentum.

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SEC Reducing Crypto Enforcement

U.Today

According to a recent report by the New York Times, the U.S. Securities and Exchange Commission is on track to substantially cut back its cryptocurrency enforcement efforts.

The approximately 50-strong unit, which is dedicated to bringing lawsuits against crypto industry players, is being reduced.

There has already been a significant shakeup within the unit, with one of the leading lawyers dealing with crypto cases being pushed out of the enforcement division.

The changes were widely expected following the departure of Chair Gary Gensler.

Acting Chair Mark Uyeda and Commissioner Hester Peirce have long been critical of the SEC's crypto enforcement efforts.

Peirce is now the head of a new crypto task force that aims to develop comprehensive rules for the industry.

The task force now has its own webpage on the SEC website. Its initial list of priorities will include examining different types of digital assets to define their security/commodity status, identifying areas outside of the SEC's purview, working on a potential safe harbor for tokens, establishing an appropriate custody regime and so on.

Stuart Alderoty, Ripple's top lawyer, has heaped praise on Peirce, claiming that she remained "a steady voice for regulatory sanity" during the previous administration's crusade against crypto. "Today's memo is another rapid step toward turning the page on the mess we all inherited," he added.

Alderoty said that he was looking forward to finally having coffee with Peirce in 2025.

As reported by U.Today, the new SEC administration was preparing to freeze and potentially drop some nonfraud crypto cases.

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Bitcoin miner Bitdeer acquires Canadian power project for $21.7 million

The Block

Bitcoin mining firm Bitdeer has completed a $21.7 million deal to acquire a 101-megawatt power project in Alberta, Canada, as the company continues to scale up its mining operations.

The Nasdaq-listed firm announced on Tuesday that it acquired the site, with permits and licenses, on 19 acres of land near Fox Creek, Alberta. The project has the potential to scale to 1 GW of power, the company said.

Bitdeer noted that it intends to further construct and develop the Alberta power plant, which it aims to energize by the fourth quarter of 2026. It also plans to build 99 MW of data center capacity for bitcoin mining on the site.

“This newly acquired site and power generation project provides the Company a unique opportunity to become the world’s first fully-vertically integrated Bitcoin miner at scale and potentially achieve some of the lowest Bitcoin mining production costs in the industry,” Bitdeer said in the statement.

“It marks a significant step in our strategy to become the first fully vertically integrated bitcoin miner, giving us unmatched control over costs, energy efficiency, and scalability,” said Haris Basit, chief strategy officer of Bitdeer.

Headquartered in Singapore, Bitdeer currently has mining operations in the U.S., Norway and Bhutan. As of December, Bitdeer has about 21.6 EH/s of hashing power under management, according to its latest operational update.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

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Crypto market has become ‘very confusing,’ losing all logic — Traders

Cointelegraph

The crypto market isn’t following the same old patterns anymore — and it’s throwing crypto traders off.

“The market is totally cooked,” pseudonymous crypto trader Sykodelic said in a Feb. 4 X post. They added that despite pro-crypto moves from the US government and President Donald Trump, the market “just keeps on retracing.”

“It has lost any sort of rhyme or reason…This is very confusing for almost every investor.”

Crypto trader The Bitcoin Therapist said in a Feb. 4 X post that “something is terribly wrong with the market’s pricing of Bitcoin.”

“We are easily $50K-$100K undervalued. There is far too much to be bullish about. There is going to be a violent repricing,” they added.

The Crypto Fear & Greed Index, which measures overall market sentiment, dropped to a “Neutral” score of 54 on Feb. 5, down 18 points from its “Greed” score of 72 just a day earlier.

The confusion comes after the broad consensus among crypto analysts and traders in late 2024 was that Bitcoin's dominance would peak in early 2025 with Trump’s election win and speculation about the US making a Bitcoin reserve

Capital was anticipated to then rotate into the altcoin market, marking what many see as the beginning of “altcoin season.”

At the time of publication, Bitcoin dominance stands at 61.40% — already higher than crypto analyst Benjamin Cowen’s prediction in August that it would top out at 60% before an altcoin season would begin.

Despite Bitcoin reaching a new all-time high of over $109,000 on Jan. 20 around Trump’s inauguration, it has recently seen increased volatility. Macroeconomic events are often not accounted for by traders in their predictions, who typically rely on historical performance.

On Feb. 3, escalating concerns over a potential trade war caused by Trump’s new tariffs on Canada, Mexico and China led to the “largest liquidation event in crypto history.”

Over $2.24 billion was liquidated from the crypto markets within 24 hours, according to CoinGlass data, though some commentators suggest the figure could be as high as $10 billion.

Trump later paused the planned tariffs on Canada and Mexico after negotiations, yet Bitcoin continues to trade below the psychological $100,000 price level.

At the time of publication, it is trading at $97,925, as per CoinMarketCap.

MN Capital founder Michaël van de Poppe said in a Feb. 4 X post that despite the US government aiming for the “golden age for crypto,” people expect “the market to be peaked.”

“It’s literally just getting started,” he added.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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Crypto prices on Feb 5: BTC slips below $98k, MELANIA top gainer

Invezz

The cryptocurrency market witnessed renewed volatility on Wednesday, following a recent recovery phase.

Cryptocurrency prices slid across the board, with the global crypto market cap going down 1.52% to $3.21 trillion.

Bitcoin (BTC) retraced to the $98,000 level, while popular altcoins like Solana (SOL) and XRP experienced downward momentum.

Trading volume in the market totalled $188.35 billion during the same period, marking a 23.00% decrease.

Bitcoin (BTC) price today

Bitcoin, the leading cryptocurrency, saw its value decline by over 1% to $97,959.35 at the time of writing.

The coin’s 24-hour trading range spanned from $96,208.11 to $100,807.91.

Liquidations of BTC positions totaled $123.44 million over the same period, according to Coinglass data.

Bitcoin’s market dominance increased slightly by 0.05%, currently at 60.50%.

The Trump administration has offered further insight into its pro-crypto initiatives, signaling potential major developments in the coming years.

AI/Crypto Czar David Sacks mentioned during a press briefing that the establishment of a Bitcoin Reserve is “one of the first things to look at.”

Separately, Commerce Secretary-led evaluations are considering Bitcoin purchases for the US Sovereign Wealth Fund.

This could indicate parallel BTC accumulation efforts by two federal agencies.

Ethereum (ETH) price today

Ethereum (ETH) bucked the general market trend, with its price going over close to 1% to $$2,717.56.

The coin’s intraday low and high were recorded at $2,636.17 and $2,869.51, respectively.

Trading volumes for the coin were down 20% at $46 billion.

XRP and SOL price today

XRP faced a sharper decline, dropping by 2% to $2.50. Its 24-hour trading range spanned $2.44 to $2.73.

The slump made the coin the biggest loser among the top 10 cryptocurrencies by market cap.

Ripple CTO David Schwartz acknowledged issues related to network consensus and validations, which may have contributed to the token’s underperformance.

Solana (SOL) followed the broader market’s bearish movement, trading marginally lower at around $204.

The token’s trading range for the day extended from $202.85 to $218.30.

Toronto-based crypto holding company Sol Strategies has increased its Solana holdings.

Between January 19 and January 31, the firm purchased an additional 40,300 SOL for approximately $9.93 million at an average price of $246.53 per token, including fees and expenses, according to a press release on Tuesday.

As of January 31, Sol Strategies and its subsidiaries hold a total of 189,968 SOL, acquired at an average price of about $179 per SOL.

The aggregate value of their holdings now stands at nearly $40 million.

Top crypto gainers and losers

Official Melania (MELANIA) led the top gainers in the last 24 hours with a 16.82% surge, currently priced at $1.64.

FTX Token (FTT) followed closely, rising by 16.30% to $2.09. Pudgy Penguins (PENGU) saw an 8.42% increase, now trading at $0.0134.

Dogwifhat (WIF) recorded a 7.97% gain, reaching $0.8397, while Hyperliquid (HYPE) rounded out the top gainers with a 7.44% increase, priced at $25.98.

Ethena (ENA) has led the declines among the top losers in the last 24 hours, dropping by 6.12% to $0.5875.

Lido DAO (LDO) followed with a 4.95% slide, now trading at $1.67.

Aerodrome Finance (AERO) also saw a 4.18% decrease, with its price currently at $0.8912.

Broader crypto price action

Internet Computer (ICP) has seen a slight uptick of 0.62% over the last 24 hours, currently trading at $7.09.

Kaspa (KAS) has slipped by 1.27% in the past 24 hours and is valued at $0.09762.

Immutable (IMX) has dipped slightly by 0.35% over the last day, trading at $0.818.

Injective (INJ) has climbed by 1.72% over the past 24 hours, reaching $14.37.

JasmyCoin (JASMY) has seen a minor decline of 0.29% in the last 24 hours, at $0.0236.

IOTA (IOTA) has risen by 3.08% over the past day and is now at $0.2269.

Helium (HNT) has remained relatively stable, with a negligible decrease of 0.07% in the last 24 hours, currently at $3.31.

Kava (KAVA) has inched up by 0.63% over the past day, trading at $0.4839.

JUST (JST) has jumped by 4.12% in the last 24 hours, reaching $0.03456.

Kusama (KSM) has seen a slight increase of 1.92% over the past day, currently priced at $19.77.

IoTeX (IOTX) has increased by 1.85% in the last 24 hours, currently trading at $0.02204.

Horizen (ZEN) has seen a slight increase of 0.23% over the last day, reaching a price of $12.57.

Kadena (KDA) has experienced a modest 0.73% rise in the past 24 hours, currently valued at $0.5558.

Hive (HIVE) has decreased by 1.55% over the last day and is now priced at $0.3222.

Huobi Token (HT) has surged by 15.63% in the past 24 hours, with its price currently at $0.8859.

ICON (ICX) has seen a 2.16% increase in value over the last day, trading at $0.1291.

IOST (IOST) has shown a 1.56% rise in the past 24 hours, now priced at $0.004877.

Kyber Network Crystal v2 (KNC) has climbed by 1.89% over the last day, currently at $0.4161.

Komodo (KMD) has seen a 1.00% increase in the past 24 hours, trading at $0.1897.

HyperCash (HC) has experienced a minor decline of 0.86% over the last day and is currently valued at $0.01603.

Klaytn (KLAY) has seen a modest increase of 0.94% in the last 24 hours, currently trading at $0.1396.

Over the past day, Libra (LIBRA) has climbed by 2.65%, reaching a price of $0.0008704.

HedgeTrade (HEDG) has experienced a slight rise of 0.12% over the last 24 hours and is currently valued at $0.005598.

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Healthcare tech firm Semler buys 871 Bitcoin, yield tops 150%

Cointelegraph

Healthcare tech and software firm Semler Scientific said that it purchased more than $88 million worth of Bitcoin over the past few weeks and was holding a paper gain of over 150%.

Semler said in a Feb. 4 press release that it purchased 871 Bitcoin between Jan. 11 and Feb. 3 for $88.5 million, at an average purchase price of $101,616 per BTC.

It also reported an aggregate yield of 152% from July 1 — the first full quarter after it adopted its Bitcoin treasury strategy — to Feb. 3. It noted its yield so far this year was 22%.

As of Feb. 3, Semler held 3,192 BTC, which were acquired for an aggregate of $280 million at an average purchase price of $87,854 per coin. The investment is worth around $313 million at current market prices.

Semler funded its crypto investment with a senior convertible notes offering and monetization of a portion of its minority investment in Monarch Medical Technologies.

On Jan. 23, Semler announced plans to raise $75 million through the private offering of convertible senior notes for its Bitcoin strategy.

“We are thrilled with the progress we are making in growing our Bitcoin stockpile,” said Semler Scientific chairman Eric Semler, adding that Semler was “pleased to have monetized a part of our investment in Monarch Medical in order to buy more Bitcoin.”

The latest figures from Semler make it the 10th-largest corporate holder of BTC, according to Bitcoin Treasuries.

In November, Semler Scientific CEO Doug Murphy-Chutorian said the firm remained “laser-focused” on acquiring and holding Bitcoin.

Meanwhile, on Feb. 3, the world’s largest corporate holder of BTC, MicroStrategy, halted its purchases, stating that it will hold its stash of 471,107 BTC, currently worth around $46 billion.

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Ethereum Leverage Elevated Despite Long Squeeze, Glassnode Says

Bitcoin Risks Losing the $90K- $110K Range as These 3 Development Could Put the Brakes on the Next Bull Breakout

SEC Reducing Crypto Enforcement

Bitcoin miner Bitdeer acquires Canadian power project for $21.7 million

Crypto market has become ‘very confusing,’ losing all logic — Traders

Crypto prices on Feb 5: BTC slips below $98k, MELANIA top gainer

Healthcare tech firm Semler buys 871 Bitcoin, yield tops 150%

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