Ethereum futures open interest at all-time high — Bullish or bearish?
28/03/2024
Investing.com– Bitcoin saw a slight uptick on Thursday, hovering within a narrow trading range observed throughout the week amid expectations for further insights into U.S. interest rates and concerns over heightened regulatory scrutiny surrounding cryptocurrencies. Meanwhile, former FTX CEO Sam Bankman-Fried received sentencing today.
The world’s leading cryptocurrency registered a 1.11% increase over the past 24 hours, trading at $70,747.7 as of 13:09 ET.
Bitcoin maintained a sideways trend for two weeks after surging to all-time highs earlier in March, with a slowdown in capital inflows into recently-approved spot exchange-traded funds indicating a waning enthusiasm for the cryptocurrency. Additionally, pressure from the strengthening dollar, reaching one-month highs this week, restrained significant advances in Bitcoin, especially as dovish statements from major global central banks prompted traders to favor the greenback as a high-yield, low-risk currency.
Bitcoin’s performance remains under scrutiny ahead of the release of the PCE price index data, the Federal Reserve’s preferred inflation measure, scheduled for Friday, which is expected to influence the central bank’s interest rate outlook. Any signs of persistent inflation could potentially alter this outlook, posing a challenge for Bitcoin as it typically thrives in high-liquidity, risk-on environments.
Following the PCE data, Federal Reserve officials Jerome Powell and Mary Daly are scheduled to deliver speeches at separate events on Friday. Market participants will closely monitor their remarks for further clues on the Fed’s stance regarding interest rates and inflation, particularly after other Fed officials struck a somewhat hawkish tone earlier in the week. Governor Christopher Waller, for instance, indicated on Wednesday that the central bank was not in a rush to commence interest rate cuts, citing persistent inflation and sufficient room for tight monetary conditions given the robust U.S. economy.
FTX Founder Sam Bankman-Fried Sentenced
Former FTX CEO Sam Bankman-Fried received a 25-year prison sentence for his involvement in a fraud and conspiracy scheme that led to the collapse of his once-prominent cryptocurrency exchange. Additionally, Bankman-Fried was fined $11 billion. Judge Lewis Kaplan announced the verdict in a Manhattan Federal court on Thursday following a two-hour hearing. Judge Kaplan noted Bankman-Fried’s lack of remorse for committing “terrible crimes.”
The sentence fell short of the 40 to 50 years in prison sought by prosecutors but significantly exceeded the five to six-year jail term proposed by the defense. Bankman-Fried was found guilty of seven charges related to the failure of FTX and the disappearance of approximately $10 billion in customer deposits following a monthlong trial in November.
SEC-Coinbase Suit Rattles Crypto
Sentiment in crypto markets was further unsettled by a significant development in the Securities and Exchange Commission’s lawsuit against crypto exchange Coinbase Global Inc (NASDAQ:COIN). A U.S. judge ruled that the lawsuit, initiated in 2023, could proceed but dismissed one of the SEC’s claims against Coinbase.
The SEC, which recently secured a significant legal victory against XRP token issuer Ripple, was reportedly seeking $2 billion in penalties from Ripple. The ongoing SEC-Coinbase suit is closely watched by crypto markets as it could determine whether crypto tokens fall under U.S. securities law, contributing to the prevailing uncertainty and keeping Bitcoin trading within a tight range.
Despite its two-week consolidation, Bitcoin is poised for a more than 50% gain in the first quarter of 2024, primarily fueled by increased capital inflows following the U.S. approval of spot ETFs earlier this year. In comparison, the S&P 500 rose by 11% in Q1, while gold saw a roughly 6.5% increase.
Bitcoin, Ether Brace for Heightened Volatility Ahead of $15 Billion Options Expiration
Market observers anticipate increased volatility in bitcoin and ether prices ahead of the quarterly expiration of options contracts valued at several billion dollars. Deribit, the largest cryptocurrency options exchange, is scheduled to settle contracts worth $15.2 billion on Friday at 08:00 UTC. Of this amount, $9.5 billion (62%) pertains to bitcoin options, with ether options comprising the remainder. According to Deribit, this $15 billion expiration is one of the largest in its history and is expected to erase approximately 40% to 43% of the total notional open interest for both bitcoin and ether.
