Bitcoin recorded heightened volatility and dropped to $72,900, its lowest level since the post-election rally in the United States. BTC later rebounded after the House of Representatives narrowly approved a $1.2 trillion funding package that ended the partial federal government shutdown. After the brief bounce, Bitcoin returned to the $75,000 area.
During the selloff, Bitcoin futures open interest contracted and funding rates turned negative, in line with a reduction in leveraged positions. BTC is now trading in a range near the $75,000 level.
On the macro side, funding for the Department of Homeland Security was extended only through February 13, keeping another fiscal deadline in the near term. In energy markets, oil reflected a moderate geopolitical reaction after the United States shot down an Iranian drone near the USS Abraham Lincoln aircraft carrier in the Arabian Sea.
Finally, on monetary policy, Donald Trump nominated Kevin Warsh as the next chair of the Federal Reserve. Warsh has expressed a preference for accelerating the reduction of the central bank’s balance sheet.
Source: https://www.qcpgroup.com/insights/qcp-market-colour/
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