The crypto market saw a rare period of volatility during Asian business hours on Monday, with bitcoin fell more than 5% to $64,270 shortly after midnight UTC before rebounding to $66,300 at 11:00 UTC.
The selloff and subsequent rebound mirrored the move in U.S. stocks. Futures contracts tracking the S&P 500 Index fell 0.84% after the open Sunday evening before starting to recover five hours later.
Gold futures did the opposite, rising at open Sunday night to their highest level since Jan. 30 before giving back some of those gains during European hours. Silver followed the most expensive metal.
The rise in precious metals and the weak performance of risk assets come after U.S. President Donald Trump announced plans to impose new 15% global tariffs on trading partners and the increased U.S. military presence near Iran fueled a rush for safe-haven assets.
Altcoins succumbed overnight to low liquidity conditions as Solana (SOL) and fell between 7% and 8% before both rebounding during European hours, a move that led to $270 million in altcoin liquidations, according to CoinGlass.
Positioning of derivative products
- Demand for leveraged products remains tepid, as evidenced by total crypto futures open interest remaining below $100 billion for over two weeks.
- Liquidations don’t help either. Over the past 24 hours, $500 million worth of crypto futures bets have been forcibly closed by exchanges due to a lack of margin.
- Traders continue to deploy capital into futures contracts linked to tokens associated with traditional assets such as gold. For example, open interest in Tether gold futures (XAUT) increased 14% in 24 hours, even as BTC, ETH, SOL, HYPE, DOGE and others continue to experience outflows.
- ZEC and CRO are the only tokens showing a positive 24-hour cumulative volume delta (CVD), a sign of buyer dominance. Meanwhile, BTC and other majors have negative CVDs, a sign of overwhelming selling pressure on buyers.
- Bitcoin’s 30-day implied volatility index, BVIV, jumped 9% to over 60%, indicating renewed nervousness.
- Traders looked for Bitcoin put options at the $58,000, $60,000, and $62,000 levels as Trump’s new tariffs injected fresh uncertainty into the market.
- On Deribit, bitcoin and ether trade at a premium to calls across all time frames, indicating continued downside fears.
Symbolic discussion
- The altcoin market remains in the red on Monday after an exaggerated sell-off was triggered by weakness in bitcoin and U.S. stocks.
- Weak liquidity conditions led Pump.fun’s native PUMP token to lose 8.5% of its value before staging a rebound, while Layer Zero (ZRO) began selling off early on Sunday, losing 16.5% over 24 hours before recovering at 04:00 UTC.
- A small number of tokens have outperformed the market as a whole. Recovery token ETHFI is up more than 10% from Monday morning’s low.
- Telegram-linked toncoin (TON) showed more stability overnight, falling just 3.6% before rebounding 4.9%.
- CoinDesk’s DeFi Select Index (DFX) was the best performing benchmark over the past 24 hours, losing just 1.84%, while the CoinDesk Smart Contract Platform Select Index and CoinDesk Computing Select Index lost 3.56% and 3.23%, respectively.
- The altcoin market largely followed bitcoin in February, but with a lack of liquidity that led to exaggerated moves. If bitcoin manages to hit a local low and rebound above $70,000, for example, several altcoins are poised for an extended rally after order books clear out in early February.
