Bitcoin plunged below $91,500 on Monday, extending a selloff that has eradicated all its year-to-date gains, while the total crypto market capitalization has been observed to free-fall at least thirty percent since October $6.
In the options market, increased wagering is being seen by traders on further reductions, as they are persuaded the downturn is nowhere near culmination as affluent buyers withdraw, Bloomberg conveyed.
The alteration in market sentiment has been observed as rapid and decisive. Demand for downside protection—particularly at price points such as $90,000, $85,000, and $80,000—has significantly increased.
Options due to expire later this month are registering particularly elevated volumes, as conveyed by data from Coinbase-owned Deribit. After riding Bitcoin’s highs just a short time ago, more than $740 million in contracts betting on continued plunges have now been acquired by traders, far eclipsing interest in bullish wagers.
Social Media Reaction
It was generally concurred by most commentators on X (formerly Twitter that the week had commenced with a messy start.
The distress has been felt most intensely by digital-asset treasuries — firms that amassed large amounts of crypto earlier this year to make crypto-backed wagers in the stock market, and their exposure was high.
While an additional $835 million in Bitcoin was recently purchased by Michael Saylor’s Strategy Inc., some of his corporate peers are facing escalating pressure to divest assets to fortify their balance sheets.
A psychological barrier has been generated by this divestment: a market populated with investors too deep in the red to purchase more, yet reticent to reduce their deficits.
It is indicated by a sentiment index from CoinMarketCap, which tracks price momentum, volatility, and derivatives, that crypto participants are presently situated in a state of “extreme fear.”
The fear index was reduced to $9, its lowest reading since July $2022.
Concurrently, $1,091 Bitcoin, worth over $100 million, were incorporated by El Salvador into its expanding crypto reserves as part of its ongoing strategy to amass the asset during market dips. Since Bitcoin was designated legal tender in $2021, the country has habitually acquired Bitcoin in downturns, with the goal of establishing a long-term digital asset treasury.
With this latest procurement, a total of $7,474 BTC, valued at approximately $688 million, is now possessed by El Salvador, further reinforcing its position as one of the largest Bitcoin holders among nations.
Wider Economic Factors
Attention is being directed by traders toward Wednesday’s earnings report from Nvidia Corp, a key indicator for technology and speculative assets, coupled with fluctuating expectations for a potential interest-rate cut to be delivered by the Federal Reserve in December.
The S&P 500 declined over one percent, subduing the mood for risk assets across the board, and the market sentiment was dampened. Ethereum’s token, Ether, has been rendered particularly susceptible, dropping to $2,975 and witnessing a twenty-four percent decline since early October.
The broader market has been grappling since a sharp liquidation wave in early October eradicated approximately $19 billion in digital assets. Open interest in crypto futures has decreased, especially in smaller tokens such as Solana, where positioning has been halved, as indicated by Coinglass data.
