The crypto market has been dragging itself higher following last week’s sell-off that saw BTC and ETH test important support levels.
BTC is now trading around $111,000 while Ether is back above $4,000. There are also strong points in the altcoin market; with LINK up 14% and FLOKI seeing a 27% gain in the last 24 hours.
Sentiment is improving after last week’s cascade of liquidations that temporarily wiped $500 billion from the crypto market. However, both BTC and ETH need to stay above their respective support levels of $110,000 and $4,000 to avoid the continuation of the downtrend, which could accelerate due to low liquidity compared to the start of the month.
Positioning of derivative products
- BTC options positioning remains firmly bullish, with a put-call open interest ratio of 0.66 and strong accumulation at the $140,000 strike price, where over $2.4 billion of notional call exposure is concentrated. This indicates that traders continue to anticipate bullish momentum through the end of the year, even as spot volatility increases.
- Total open interest in Bitcoin Deribit options climbed to 427,746 contracts, marking a yearly high. The December 26 expiration dominates ($14.3 billion notional), suggesting traders are extending their bullish bets further out on the curve while maintaining tactical flexibility on shorter-term options.
- ETH options feature similar positioning, with call dominance around the $4,000-$4.5,000 strike prices and increasing open interest through late December expirations, mirroring the structure of BTC.
Symbolic discussion
By Olivier Knight
- An increase in the value of several altcoins, including the popular memecoin floki, led to improved crypto market sentiment on Monday, although CoinMarketCap’s seasonal altcoin index remains at 26/100, indicating investors’ preference for bitcoin over speculative plays.
- Bitcoin dominance, a metric used to gauge how much of the total crypto market capitalization can be attributed to BTC, is 58.8%, an increase from the same period last month when it was 57.2%.
- Although there were signs of recovery on Monday, several altcoins are still significantly lower than they were a week ago. Synthetix is down 30%, while others including FET, ASTER and BNB are all facing losses between 15% and 25%.
- One driver of positive sentiment on Monday was LINK, which rose 14% after a series of wallets collectively withdrew $116 million worth of tokens from Binance, indicating a buildup following last week’s crash.
- The average relative strength index (RSI) for cryptocurrencies is 54.2/100, suggesting that the market is in a state of uncertainty as it moves away from key support levels, but remains far from challenging major resistance levels.
