The crypto market continued to establish new support levels on Thursday, with Bitcoin trading around $103,000 while ether rose less than 1% to $3,500.
The average relative strength index (RSI) of cryptocurrencies remains in neutral territory while the fear and greed index prints 25/100, indicating negative sentiment in the market.
There has been a bit more action in the altcoin market. AERO fell 18% in the last 24 hours following the announcement of a merger with Velodrome, while STRK and FET also saw double-digit declines.
XRP led gains among the largest cryptocurrencies, rising 3.5% following a flurry of activity in the options market.
The market needs a catalyst before confirming a potential downtrend from October’s record high, or a potential bottom around $98,000. The dollar remains relatively strong, around 99.8; a breakout above 100 would put pressure on risky assets like the crypto sector.
Positioning of derivative products
By Omkar Godbole
- Despite the US government’s reopening announcement, Volmex’s BTC and ETH 30-day implied volatility indices remain within their recent high ranges, highlighting lingering structural issues that continue to keep volatility expectations high.
- Futures markets continued to eliminate risk. Bitcoin’s open interest (OI) fell 3.58% to $66.14 billion, with liquidations totaling $186.47 million. Most of them were long traders betting on rising prices.
- OI in SOL, HYPE, and DOGE also decreased, while ZEC futures saw inflows, increasing OI by 4%.
- On the CME, the three-month annualized premium for ether futures fell below 6%, representing a reduction from the BTC premium for the first time in weeks. This does not necessarily imply a relative decline in ether, it could reflect an increase in liquidity and carry arbitrage in the second largest cryptocurrency.
- On Deribit, strangles accounted for 27% of the total BTC block options flow over the past 24 hours. This is a sign of a growing bias towards non-directional strategies that rely on the degree of price volatility. This was the case last week.
- In the case of ETH, diagonal and call calendar spreads are two of the most popular strategies.
- Generally speaking, BTC and ETH options continue to favor puts, which provide downside protection, in the short term.
Symbolic discussion
By Olivier Knight
- The altcoin market continued to consolidate on Thursday after what has become a long period of low-volatility price action.
- Data from CoinGlass shows that open interest across all crypto markets fell 1.13% to $142 billion, while 24-hour volume increased 25% to $328 billion, demonstrating a preference for spot trading over derivatives.
- Ether traded little, while tokens including Solana bnb And all found themselves in the red between 0.2% and 1.8%.
- AERO, the token linked to Base’s main decentralized exchange (DEX), Aerodrome, lost 18.2% after a rally on Wednesday.
- The relative volatility may be linked to the announcement that the company is upgrading its protocol infrastructure to support EVM-compatible extensions, integrating with Circle Internet’s Arc blockchain and broader “MetaDEX” hubs, expanding the reach and capabilities of its ecosystem.
- Aerodrome also announced that it would merge with Velodrome, becoming a protocol with a unified token. AERO holders will get 94.5% of the new token and VELO holders 5.5%.
- and the FET token also saw sharp declines – 13.8% and 11%, respectively – although both remain significantly higher during the week.
Don’t miss this opportunity: click here for a direct link to Cryptocurrency markets today every day.
