Last week, the crypto market experienced one of its largest single-day wipeout events in open futures contracts that was ever recorded, also known as the liquidation cascade. To help you understand the sheer scale of the event, it was the second-largest decrease in the value of open futures contracts in terms of dollar value.
The decline was severely felt in the value of Bitcoin futures contracts.
According to data compiled by Glassnode, Thursday’s events signified the fifth-largest single-day decline in Bitcoin futures open interest, especially in the case of non-expiring, perpetual futures contracts. This highlights the volatile and high-risk nature of the cryptocurrency market in its futures segment.
Bitcoin Is Actually Undervalued And Not At The “Buy The Dip” Point
Meanwhile, Bitcoin (BTC) spot markets have been consolidating between $25,800 and $26,100 since August 18. However, market analysts suggest that the flagship cryptocurrency is actually undervalued.
According to crypto intelligence firm Santiment, the market value over realized value (MVRV) ratio – which represents the ratios between the currency price and the realized price of an asset – of Bitcoin on a 30-day moving average has dropped 8.49%, which means that the asset’s price is currently undervalued.
Santiment also mentioned that since last week, the optimism among investors for a quick market recovery has faded. An analyst for the agency said it was a good sign that the term “buy the dip” is not being used as commonly as before because investors are sure that the current BTC price level is not a “dip buy spot”.
Even though single-day prices for the cryptocurrency fell off a cliff on Thursday, long-term active Bitcoin holders continue to see profits. The 365-day MVRV ratio for BTC remains above 5%, and short-term spot positions for the asset remain open on exchanges despite the price downturn.
Whales Continue To Accumulate BTC
Bitcoin dropped below the $26,000 mark on Sunday, but the number of wallets holding at least one BTC reached a new all-time high.
In the meantime, crypto whales continue to accumulate Bitcoin. Last Monday, two wallets on Coinbase received 2,566 BTC, worth $75.5 million at the time, from an anonymous address. Another Coinbase address received 3,201 BTC worth around $95.5 million.
The biggest of the lot were two other transactions, one involving a Gemini wallet that transferred $10,798 BTC worth over $300 million and an anonymous wallet that accumulated 118,300 BTC, worth a whopping $3.08 billion at current rates, over the period of the last three months.
Another significant event was the awakening of a Satoshi-era Bitcoin wallet that contained freshly mined tokens. The wallet in question belonged to an anonymous whale and was created in 2010, just a year after Bitcoin’s inception. It had 1,005 BTC worth $29.75 million inside.
The “virgin” Bitcoin that sat dormant for over a decade was moved out to another anonymous wallet in separate transactions. The awakened wallet received 1,000 BTC in November 2010, when the asset was trading at just $0.225, and the remaining 5 BTC were sent in April 2011, at which point the asset was valued at $1.31.
At the time of writing, Bitcoin (BTC) is trading at $25,929.71 – down 0.4% since yesterday. The 24-hour trading volume on the Bitcoin network stands at $11.724 billion.
