• $500 million in liquidations on crypto derivatives, though DeFi blue chips AAVE and 1INCH buck the trend with double-digit gains
  • Eth 2.0’s ‘Beacon Chain’ completed its ‘Altair’ hard fork shortly before 7:00 am ET.

Bitcoin and the broader digital asset market fell sharply during early morning hours in New York, with BTC notching a roughly 5% decline and ETH tumbling over 8% in the space of a few hours, driven by cascading liquidations of traders using dangerously high levels of leverage.

In recent days both the amount of leverage and the open interest in crypto derivatives markets have been climbing to levels not seen since the September 7, 2021 mini-crash. This has been a frequent theme of the current bull market rise, and the third such drawdown in the past week alone.

Ether’s drop was more pronounced, though also similar to an 8% drop seen on October 21, after the second largest cryptocurrency registered an all-time high.

But the prospect of an ether ETF is unlikely in the near term, Acheson notes, due to a relative lack of liquidity in the ether futures market on the CME, and the need for greater regulatory certainty, chiefly from the US SEC, as to its potential status as a security.

Outliers: AAVE and 1INCH

New listings on centralized exchanges still can have a strong influence on the price of even well-established DeFi names. The 35% rise in money-market protocol AAVE and and more than 80% for decentralized exchange 1INCH is an apparent consequence of new listings announced against BTC trading pairs by Korean exchange Upbit.

Both names subsequently gave back about half their gains along with the larger market decline.

Bitcoin CME Futures have been trending down since their peak seven days ago at $67,680. Nasdaq and S&P 500 futures are trading flat, falling about -0.3% during the crypto market skid before bouncing.

This story was updated on October 27 at 8:27 am ET.

  • Macauley was an editor and content creator in the professional chess world for 14 years, prior to joining Blockworks. At Bucerius Law School (Master in Law and Business, 2020) he researched stablecoins, decentralized finance and central bank digital currencies. He also holds an MA in Film Studies; film credits include Associate Producer of the 2016 Netflix feature documentary, "Magnus" about World Chess Champion Magnus Carlsen. He is based in Germany.

    Contact Macauley via email at [email protected] or on Twitter @yeluacaM

By admin