Over the weekend, Bitcoin (BTC) and Ethereum (ETH) showed little price movement following a significant $400 million leverage flush out on Friday, which led to a decline in open interest and trading volumes, slowing market momentum.
Analysts at Presto Research, told CoinDesk that they anticipate a return of market volatility in the coming week due to several macroeconomic events, including the release of the Consumer Price Index (CPI) on Wednesday, the Federal Open Market Committee (FOMC) meeting on Thursday, and a speech by Treasury Secretary Janet Yellen on Friday.
On Friday, the release of stronger-than-expected non-farm payrolls (NFP) figures, which showed the US economy adding 275,000 jobs compared to the predicted 185,000, led to a sharp decline in Bitcoin prices from $71,000 to $69,000. This drop was due to a record build-up of leverage on Bitcoin futures, which ultimately cost bulls.
The connection of risk assets
In other news, a slide in the price of meme stock GameStop (GME) appeared to negatively impact riskier assets, such as alternative tokens and meme coins. Major meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB) experienced losses of up to 10%.
Since Friday, open interest across various tokens has decreased from $99 billion to $60 billion, indicating that traders have significantly reduced their bets. Additionally, trading volumes have fallen by 10% in the past 24 hours, according to Coinglass data. As of early European hours on Monday, BTC was trading just above $69,400, while ETH was around $3,660.
The news follows recent positive comments concerning Bitcoin by NSA whistleblower Edward Snowden. In the wake of a significant market disruption caused by a technical glitch on the New York Stock Exchange he simply wrote:
Bitcoin fixes this.
The comment was largely aiming to highlight Bitcoin’s reliability since it has a near-perfect uptime and only experienced two notable incidents. The first one being “value overflow incident” in 2010, where a bug that was fixed within five hours created billions of BTC out of thin air.
The second one was a temporary network split in 2013 caused by an incompatible software upgrade. Both issues were quickly resolved by the core developers, further reinforcing Bitcoin’s resilience.
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