The cryptocurrency market remains under pressure on Monday despite US stock futures rising around 0.25% since midnight UTC.
Bitcoin is trading at $68,710, after losing 0.1%. Altcoins such as HYPE, ZEC and XMR are down over 3%.
Ether is one of Monday’s outliers, up 0.43% since midnight as it returns to $2,000 after a grueling weekend sell-off brought on by selling pressure from trader Garrett Jin.
Onchain data shows that a wallet attributed to Jin deposited more than $540 million worth of ether on Binance over the weekend, leading to a disproportionate increase in sales volume compared to other exchanges.
This pressure translated into oversold conditions that ultimately set the stage for Monday’s rally.
Gold is changing hands at $5,000 on Monday, down from its Jan. 29 high of $5,600, but outperforming silver and crypto, which are down 36% and 21%, respectively, over the same period.
U.S. markets are closed Monday due to a public holiday.
Positioning of derivative products
- The cryptocurrency futures market continues to experience capital outflows, with notional open interest (OI), or the dollar value of total open or active contracts, falling to $98 billion.
- Risk reduction is seen across the board, with OI falling by 1% and 2.7% on 24-hour Bitcoin and Ether futures, respectively. XRP, DOGE, SUI and ADA saw declines of 6% or more.
- The OI on futures contracts linked to the XAUT gold token increased by 8% as traders continued to deploy capital into traditional assets.
- The 30-day implied volatility of BTC and ETH has reversed the sharp 50% annualized rise to nearly 100% earlier this month when prices collapsed. This reversal indicates a massive elimination of volatility risks, supporting the case for a price recovery.
- The gap between the ether and bitcoin implied volatility indices is starting to widen, indicating that larger fluctuations in ether are expected.
- Funding rates for several alternative tokens, such as XRP, TRX, DOGE, and SOL, remain negative, indicating a preference among traders for short and bearish positions. If the market remains resilient, these bears may feel forced to end their bets, which could lead to a short squeeze on the upside.
- SOL futures on CME are showing an annualized premium close to zero, a sign of rapidly diminishing buy-side pressure. BTC and ETH futures are trading at slight premiums.
- On Deribit, someone paid $3 million premium for the $75,000 strike bitcoin call option. This massive flow likely represents a bullish bet on the market.
- Nonetheless, puts linked to BTC and ETH remain more expensive than calls across all time frames, a sign of continued downside concerns.
Symbolic discussion
- The altcoin market experienced a familiar low liquidity dip on Sunday before a slight recovery on Monday morning.
- Popular memecoin is down more than 10% in the last 24 hours but has stabilized since midnight UTC, while XRP is up 1% at midnight despite losing 8% of its value since Sunday morning.
- Layer Zero (ZRO) continues to lose momentum after its early February rally, falling more than 34% in the last five days, including a 10% drop in the last 24 hours. The fall comes after the introduction of a native blockchain in collaboration with Wall Street veterans Citadel Securities and DTCC.
- The bitcoin-heavy CoinDesk 5 Index (CD5) is up 0.38% since midnight UTC, while the altcoin-dominated CoinDesk 80 (CD80) has lost 0.17% over the same period, demonstrating the altcoin’s relative weakness.
