Bitcoin’s Bad Day: When Meme Coins and Whales Collide 🐳📉

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Ah, the crypto market—a theater of absurdity where fortunes are made and lost faster than one can say “HODL.” The recent selloff, my dear reader, was as predictable as a politician’s broken promise. The global market cap, once a towering $3.52 trillion, now resembles a deflated soufflé, tumbling over 3%. Bitcoin, the once-mighty king of digital gold, fell more than 3% to a paltry $102K. Trading volume? Down three-fold since the glorious (or not-so-glorious) inauguration of Donald Trump. Ethereum, too, joined the pity party with a 3% drop, while XRP, Solana, and other altcoins followed suit like obedient lemmings. And let us not forget the meme coins—Dogecoin and Shiba Inu—tumbling like drunken sailors after a whale-sized selloff. 🐕💸

But why, you ask, did this grand spectacle of financial despair unfold? Let us delve into the four reasons, each more tragicomic than the last.

1. Market Sentiments and Liquidations: The Great Unraveling

Coinglass, that oracle of doom, revealed a staggering $250 million in crypto liquidations. Over 107,000 traders were liquidated, their dreams dashed like so many champagne flutes at a teetotaler’s wedding. The largest single liquidation? A BTCUSDT order worth $5.93 million on OKX. BTC, SOL, ETH, DOGE, TRUMP, and XRP all saw massive liquidations, triggering a selloff that would make even the most stoic investor weep. 🎭

And what, pray tell, caused this cascade of despair? Trump, that maestro of market-moving speeches, failed to mention crypto or Bitcoin. The industry, ever hopeful, awaited an executive order on strategic Bitcoin reserves or crypto policy. Instead, they got the US SEC’s Crypto Task Force, led by Commissioner Hester Peirce. A clear regulatory framework? How delightfully optimistic. 🎪

Capital inflows into the cryptocurrency market have declined by 63.3%, dropping from $134.65 billion to $43.37 billion since December 10, 2024. This significant decrease suggests a slowdown in market participation and liquidity.

— Ali (@ali_charts) January 23, 2025

2. Bank of Japan’s Interest Rate Hike: The Yen Carry Trade Unwind

The Bank of Japan, that bastion of monetary mischief, is expected to raise interest rates to the highest in 18 years. A 25 bps hike to 0.5%? How positively thrilling. This move risks unwinding the Yen carry trade, threatening global liquidity and risk assets like BTC. The crypto market, already reeling from the “Trump trade” optimism, now faces further selloff. Meme coins launched by the Trump family? Consider them collateral damage. 🎢

3. US Fed Interest Rate Decision: Powell’s Poker Face

Ah, Jerome Powell, the Fed Chairman with a poker face that could rival the Sphinx. The US Federal Reserve’s monetary policy decision is the key to this year’s market drama. Recent inflation and strong jobs market data have taken Fed rate cuts off the table. The CME FedWatch tool indicates a 99.5% probability of the Fed keeping interest rates unchanged at 4.25%-4.50%. Meanwhile, the US dollar index (DXY) climbs toward 109, and the 10-year Treasury yield hovers near 4.6%. Bitcoin, ever the contrarian, moves in the opposite direction. How delightfully rebellious. 🃏

4. Bitcoin and Ethereum Options Expiry: The Max Pain Point

As per Deribit, 29K BTC options worth $3 billion are set to expire, with a put-call ratio of 0.48. The max pain point? $99,000, suggesting another drop below $100K. Volatile price movements during options expiry? Quelle surprise. BTC currently trades at $102,467, down 3% from its 24-hour high of $105,557. 🎡

And let us not forget Ethereum. 169K ETH options worth $0.5 billion are set to expire, with a put-call ratio of 0.47. The max pain point is $3,300, higher than the current price of $3,220. Traders, brace yourselves for drastic changes in trading volumes. The drama never ends. 🎭

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2025-01-23 12:14