Crypto news

August witnessed a decline in liquidity, leading to crypto market outflows totaling $55B.

Crypto exchange Bitfinex’s report reveals that capital outflows in the crypto market amounted to $55 billion in August.

The analysis employed the aggregate realized value metric, which considers the realized capital of Bitcoin and Ether along with the combined supply of the top five stablecoins: Tether, USD Coin, Binance USD, Dai, and TrueUSD (TUSD).

The report highlights a prevailing trend of capital outflows that emerged in early August,

impacting not only Bitcoin but also Ether and stablecoin liquidity.

“August was the largest red monthly candle for BTC since the bear market bottom was formed in November 2022 at -11.29 percent as per Bitfinex Data.” 

Bitfinex
Aggregate market realized value net position change.

In addition to the capital outflows, the analysis reveals the resurgence of event-based volatility,

where specific incidents can exert a substantial influence on prices and broader market dynamics.

During August, two isolated events had a notable impact on Bitcoin prices.

On August 17, a flash crash triggered an 11.4% sell-off for BTC. Furthermore,

Grayscale’s partial legal victory against the Securities and Exchange Commission on August 29 led to a price surge of 7.6% within a span of two hours.

These events demonstrate the sensitivity of the crypto market to specific occurrences and their potential to drive significant price movements.

According to the analysis, Bitcoin open interest has surpassed the overall performance of the crypto markets.

This growth can be attributed to the rising institutional interest in Bitcoin and the presence of wash trading on certain exchanges.

In contrast, Ether futures and options have experienced a significant decline in 2023 compared to previous years.

The daily volume for Ether futures and options has dropped to $14.3 billion,

marking a sharp decrease of almost 50% from the two-year average.

These trends highlight the contrasting trajectories of Bitcoin and Ether in terms of market interest and trading activity.

Bitcoin open interest across exchanges.

Open interest reflects the total invested capital in Bitcoin derivatives.

“The trajectory seen in the derivatives market, particularly in open interest across both futures and options, mirrors these patterns of low liquidity,”

Bitfinex

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