The year 2023 began with an event where traders holding positions were consistently causing liquidations, in the Bitcoin futures market. However on August 17th the market experienced a shock. A flash crash
occurred, leading to the liquidation of positions, worth over $213.5 million. This event became the single day occurrence, since the collapse
of Terra Luna in May 2022. The unexpected shake up left investors feeling disoriented.
Since that moment Bitcoin has been witnessing an outflow of capital, which reflects the cautious approach of risk averse investors who are now hesitant to engage with both Bitcoin and its counterpart, Ethereum
. Despite starting strong in derivatives markets for 2023 there has been a decline in risk appetite compared to the days of 2021 and 2022. As a result there has been a loss of $6 billion, in terms of market capitalization.