The crypto market saw a weak liquidity sell-off over the weekend, dragging down bitcoin. up to $74,674 and ether at $2,164, although both have found support at levels not seen since April and June of last year and are now up around 1% since midnight UTC.
The sell-off wiped out $290 billion in crypto market capitalization since the start of Saturday as the decline intensified over the weekend.
U.S. stocks are lower in premarket trading, with S&P 500 index futures down 0.58% and Nasdaq 100 futures down 0.85%, as risk assets fell across the board.
Gold and silver cooled after hitting record highs last week, each losing about 3.5% since midnight.
“The silver bubble well and truly burst on Friday after lenders increased their margin calls to speculators,” Derren Nathan, head of equity research at Hargreaves Lansdown, wrote in a note Monday morning. “This followed Donald Trump’s nomination of Kevin Warsh, one of the race’s most hawkish contenders, to the top Federal Reserve bank post.”
Positioning of derivative products
- Futures open interest (OI) across the market fell to $108.94 billion, the lowest since April, indicating a growing aversion to leveraged bets. The total peaked at $223 billion in October.
- More than $800 million in leveraged bets were forcibly closed by exchanges in 24 hours. Most of them were bullish long plays.
- The OI on BTC and ETH futures fell by over 1% and 3%, respectively. Several coins such as SOL, DOGE, SUI, ADA, and LINK saw their OI increase, likely due to traders shorting the dip.
- The ZEC, WLFI, TON, BCH, and XLM markets saw clear buying pressure, as indicated by positive cumulative volume delta (CVD) readings. Other majors, including bitcoin and ether, have negative CVD readings.
- On the CME, Bitcoin futures opened lower at $77,730 compared to Friday’s close of $84,105 following the weekend’s drop in spot prices. Markets often fill gaps, meaning the price could rebound above $80,000.
- On Deribit, the $75,000 put option is now as popular as the $100,000 bet. Other puts of $80,000 and $70,000 also show significant accumulation of open interest. Together, they highlight fears of a decline.
- Block flows presented a demand for a butterfly ether sales strategy aimed at profiting from large-scale play. Traders appear to be anticipating consolidation following recent setbacks. In BTC, traders chase put spreads.
Symbolic discussion
- The altcoin market was not immune to risk-off sentiment this weekend as low liquidity conditions led to a wave of liquidations, with over $300 million worth of ether positions forcibly closed over the past 24 hours.
- Privacy Coin Dash has now lost 25% of its value over the past week, while blockchain native tokens are bullish , ether And al fell by more than 20% over the same period.
- One notable outlier is HyperLiquid’s HYPE, up more than 40% over the past week and 13% from Saturday’s low of $27.5.
- HYPE soared last week after heavy volume in frenzied precious metals markets, which presented another crypto use case for traditional financial traders.
- Jupiter’s JUP token was among the best performers since midnight UTC, up 7.9% after falling almost 25% over the weekend.
- The low liquidity of altcoin markets, typically gauged by a lack of market depth, means that larger moves are often exaggerated in either direction because the demand for instant buyers and sellers is not met by enough pending orders in the order book.
