The crypto market retreated from potential peril on Thursday, with bitcoin up 3.9% from a local low of $65,600.
Prices rallied overnight, with bitcoin gaining 2% since midnight UTC, solana (SOL) gaining 2.7% and ether (ETH) rising 1.2%.
The broader downtrend, however, remains intact, with Bitcoin printing a series of lower lows and lower highs to give back all the gains it made in the 12 months ended October 2025.
In the short term, bitcoin needs to rise above $72,000 to confirm a bullish shift from the range-bound price action that has seen it hover between support and resistance.
Spot Bitcoin ETFs in the United States recorded their biggest decline this cycle, with 100,300 BTC in withdrawals since October. This equates to approximately $6.8 billion in additional selling pressure in an already fragile market.
Positioning of derivative products:
- Market dynamics are stabilizing. Open interest reached $15.8 billion, signaling a move from a leverage cleanup to a firmer floor, and retail confidence is rebounding, with funding rates moving from stable to positive across all venues and reaching 10% on Bybit and Hyperliquid.
- Institutional conviction remains anchored, with a three-month annualized base persisting at 3%.
- The BTC options market is showing a slight change in sentiment, with 24-hour volume reaching a 51/49 split in favor of calls.
- While the 1-week delta skew of 25 has jumped to 17%, the term structure of implied volatility (IV) remains in near-term backwardation.
- This persistent spike confirms that traders are still paying a “panic premium” for immediate protection, even as longer maturities stabilize at nearly 49%.
- Data from Coinglass shows $179 million in liquidations over 24 hours, with a 56-44 split between long and short positions. BTC ($59 million), ETH ($46 million) and others ($16 million) were the leaders in terms of notional liquidations.
- Binance’s liquidation heat map shows $68,400 as the base liquidation level to watch for in the event of a price rally.
Symbolic discussion
- Altcoins were buoyant overnight, with lending token MORPHO up over 12% since midnight UTC and payments token AI KITE adding 11%, extending its 153% 30-day rally.
- Rotation was also seen among DeFi tokens such as Jupiter (JUP), which surged more than 3.6% after hitting its lowest point in seven days on Thursday.
- The CoinDesk Smart Contract Platform Select Index (SCPXC) was the best performing benchmark over the past 24 hours, posting a gain of 2.25%, followed closely by CoinDesk’s Memecoin Index (CDMEME), up 2.2% over the same period.
- The Bitcoin-dominated CoinDesk 20 (CD20) gained 1% as crypto majors posted more moderate gains.
- Altcoins generally perform well during periods of consolidation because traders have the freedom to pivot their capital into more speculative bets without the risk of missing out on a move like Bitcoin, Ether, and XRP.
