Yesterday, CME's Bitcoin futures trading volume hit a record in the last month.
So the financial markets were very active in Bitcoin yesterday.
After all, in just one hour, the price dropped from $ 39,000 to $ 30,000, and then very quickly rose to $ 37,000, to reach $ 40,000 in about two hours.
There have been similar shocks in the past, but never that fast, both in terms of decline and recovery.
The Impact of the Sudden Drop in Bitcoin Futures Trading
The hypothesis is that this sudden drop contributed to a change in the composition of the bitcoin market and, in particular, of its holders.
The BTCs that changed hands yesterday are many, and it is possible that the dominant profile of those who sold was markedly different from those who bought.
Yesterday's sales were mainly due to genuine panic, while those who bought at prices that fell so low so quickly were surely not under the influence of fear at the time.
This can be clearly seen in the crypto markets fear and greed index, which fell to 11 (extreme fear) yesterday, after many months of being around 90. It has not been this low since April last year, while just eight days ago. I was still at 68.
In other words, yesterday the crypto markets generated large trading volumes, probably due, on the one hand, to particular types of investors who sold in a panic, perhaps to close stop loss, while on the other hand stronger hands took the opportunity to accumulate, with in the end, a large transfer of funds of the first type to the second.
In some ways, yesterday may have been a turning point after a period of real decline that took the price of bitcoin from its mid-April high of almost $ 65,000 to yesterday's $ 40,000, excluding the sudden drop.
It should also be noted that, according to data from CoinGecko, BTC dominance went from 37.76% to 42.29% in a single day, recovering ten days of declines in this metric in just 24 hours.