Crypto market reeling from overnight sell-off, with Bitcoin trading lower at $69,400 after losing 2.6% since midnight UTC and ether (ETH) returning towards $2,000 after falling 4.1%.
These declines are accompanied by a sharp decline in US stocks and precious metals. Nasdaq 100 futures are down about 1% while gold lost 1.8%.
Oil, meanwhile, has climbed back above $100 a barrel as so-called peace talks between the United States and Iran have stalled.
The altcoin market was hit the most, with the CoinDesk Computing Select Index (CPUS) and CoinDesk DeFi Select Index (DFX) falling 4.3% and 3.9%, respectively, during the Asian session.
Zooming out, bitcoin and the broader crypto market are still stuck in a price range that has persisted since early February despite multiple attempts to move higher.
Positioning of derivative products
- The impasse in negotiations between Iran and the United States appears to have triggered a new risk aversion, leading to capital outflows from crypto derivatives. Cumulative open interest (OI) in crypto futures decreased 3.5% to $108.30 billion.
- PAXG’s OI fell almost 11% in 24 hours, with the price of gold falling 1.8% to $4,423 per ounce. Other big losers in OI include DOGE, ZEC, and TAO.
- Some traders may have shorted BTC futures on major exchanges as prices fell below $70,000 during European opening hours. This is evident from the slight rise in OI across major dollar and USDT denominated exchanges from 229,000 BTC to 232,000 BTC.
- ETH, BNB, XPR, SOL, TRX, and DOGE are experiencing negative funds rates, a sign of increased short and bearish bias.
- Meanwhile, CC, TRX, and BCH stand out with positive cumulative volume deltas indicating positive positioning while other majors, including BTC, see seller dominance.
- In the options market, some traders seek protection against ether’s decline by purchasing risk reversals, a position that involves selling call options to fund put option purchases, TDX Strategies said in a market note.
- On Deribit, BTC and ETH puts remain more expensive than calls over all durations. Ether puts are initially more expensive than BTC puts, a sign that traders are preparing for a bigger drop in ether in the near term.
Symbolic discussion
- The crypto market is generally red on Thursday, but some tokens are faring worse than others; AI-focused FET is down 7.7%, while ETHFI and RENDER have given up much of last week’s gains, falling 6.3% and 5.9%, respectively.
- The Altcoin Season Index is still at 48/100, suggesting that a bullish recovery could be on the cards if the market manages to find support and consolidate.
- About half a dozen tokens in the top 100 remained in the black over the past 24 hours, including Ethena (ENA), up 2.2%, and layer 1 network tokens XDC, NIGHT, and TRX, all between 1% and 2% higher.
- Overall, the worryingly low liquidity that has failed to recover since late 2025, coupled with the fickle nature of retail crypto traders, could create a perfect storm in the altcoin market, producing an exaggerated downturn.
