Bitcoin, ether close out rough month amid Fed pivot; crypto stocks nosedive

Jan. 31, 2022 4:05 PM ETBitcoin USD (BTC-USD), ETH-USDMSTR, RIOT, MARA, GBTC, OBTC, BITOBy: Max Gottlich, SA News Editor41 Comments

Bitcoin Cryptocurrency trends Graphs and charts

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In the wake of broader risk asset deleveraging in anticipation of upcoming Fed hikes, bitcoin (BTC-USD) and ethereum (ETH-USD) finish January on a weak note.

  • M/M, bitcoin (BTC-USD) -20% fell even further from its mid-November record high at $69.4K, recently changing hands at $38.5K. Ether (ETH-USD) -30% also extended losses from its November peak at $4.9K on continued selling pressure, recently standing at $2.6K.

Moreover, bitcoin's (BTC-USD) put-call ratio rose to a six-month high of 0.62 on Sunday, CoinDesk reported, citing data from Skew. This compared with 0.42 earlier in January. "The put-call ratio suggests demand for puts is currently high," Patrick Chu, director of institutional sales and trading at Paradigm, told CoinDesk. "We have seen a lot of risk reversal flow recently, where clients were buying puts/ selling calls," he added.

  • A chunk of the bearish sentiment evolving around crypto assets can also be seen in the M/M nosedive in publicly-traded "bitcoin proxies." Some of these names include: Grayscale Bitcoin Trust (OTC:GBTC) -29%, MicroStrategy (NASDAQ:MSTR) -40%, ProShares Bitcoin Strategy ETF (NYSEARCA:BITO) -21%, Osprey Bitcoin Trust (OTCPK:OBTC) -27%, Marathon Digital (NASDAQ:MARA) -37% and Riot Blockchain (NASDAQ:RIOT) -37%. Clearly, if BTC and ETH prices continue to fall, crypto stocks will likely be impacted negatively, and vice versa.

Furthermore, digital asset investment products have seen outflows for the first time since August, with weekly outflows averaging $88M in January, Bloomberg reported, citing a report from CryptoCompare. And total assets under management for BTC products have declined by 23% since December, Bloomberg added. Overall, the crypto market is “a much trickier environment than it was six months ago, 12 months ago, 18 months ago where it was ‘green-light go.’ Now it’s ‘yellow-light caution,” FS Investments Chief Market Strategist Troy Gayeski told Bloomberg.

Earlier in January, Genesis' crypto lending desk got hit with a wave of deleveraging.

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