Bitcoin prices experienced a sharp decline on Monday, prompting a wave of selling pressure from short-term holders and a significant reduction in open futures bets on the Chicago Mercantile Exchange. This downward movement coincided with the release of AI technology from DeepSeek, a Chinese startup challenging U.S. dominance in the field.
A significant decline in bitcoin prices on Monday triggered a wave of selling pressure, with short-term holders exiting the market at a loss and derivative traders scaling back their positions. According to CoinDesk Indexes pricing, bitcoin plunged as much as 4.7%, the most in two weeks, reaching lows under $98,000. This downward movement coincided with the release of the Chinese startup DeepSeek's AI technology, which challenged U.S. leadership in the field.
Short-term holders, defined by Glassnode as addresses with a history of holding coins for less than 155 days, transferred over 21,000 BTC ($2.2 billion) to exchanges at a loss. This massive outflow, the second-biggest this month, may indicate that investors who purchased bitcoin near its record highs around $108,000 earlier this year were shaken by the recent price drop. These addresses, often associated with active traders, new entrants, and weaker hands, tend to be more susceptible to price fluctuations.The decline in bitcoin prices also affected the derivatives market, with the Chicago Mercantile Exchange (CME) witnessing a record $2.4 billion (17,000 BTC) drop in open interest (OI). This significant de-risking move, coupled with a double-digit slide in chipmaker Nvidia (NVDA), suggests a shift towards bearish sentiment. U.S. listed bitcoin exchange-traded funds (ETFs) also experienced a substantial outflow of $457.6 million, similar to the outflow observed on January 13th. This confluence of events points towards a potential bottoming out of the bitcoin price, similar to what was observed on January 13th and August 5th
BITCOIN PRICES DERIVATIVES SHORT-TERM HOLDERS CHICAGO MERCANTILE EXCHANGE OPEN INTEREST AI DEEPSEEK
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