BTC price dips 3.5% as 'overheated' Bitcoin derivatives spark angst
Bitcoin (BTC) broke below $35,000 after the Nov. 2 Wall Street open as analysis warned of “overheated” derivatives.
Data from Cointelegraph Markets Pro and TradingView tracked a retreating BTC price as it erased ground it reclaimed overnight.
The largest cryptocurrency had hit new 18-month highs of $35,968 on Bitstamp before consolidating — a process which was gathering momentum at the time of writing.
The highs had come on the back of encouraging language from Jerome Powell, Chair of the United States Federal Reserve, who in a speech suggested that interest rate hikes might soon end.
The Fed opted not to change rates at the latest meeting of the Federal Open Market Committee, or FOMC, on Nov. 1.
“Recent indicators suggest that economic activity expanded at a strong pace in the third quarter. Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation remains elevated,” an accompanying press release stated.
As Cointelegraph reported, $35,000 quickly became a key BTC price support level to hold for market participants once reached. The area above $34,500, meanwhile, was described as an “ideal” target for a local low.
#Bitcoin breaks out and reaches a new yearly high.
Not a massive breakout, but as long as we stay above $34.8K, the next target is $36.5-37K.#Altcoins to follow after. pic.twitter.com/3aCKwvoGXq
Now down over $1,000 from its highs, however, Bitcoin was worrying some, with derivatives markets particularly in focus.
“All Bitcoin derivatives markets are overheated at present,” Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments, wrote on X alongside Capriole’s own data.
Reacting, popular trader Skew agreed, arguing
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