Crypto market fell to lowest level in over two weeks, with Bitcoin falling below $67,000 and ether (ETH) closing in on $2,000. The CoinDesk 20 Index (CD20) has lost 2.2% since midnight UTC, reaching its lowest level since March 9.
This fall coincided with a decline in US stocks. Nasdaq 100 futures are now trading at 23,760, 10% below the high in January of this year.
The risk-off atmosphere was fueled by rising oil prices and fears that the war in Iran would not deescalate as quickly as many had hoped. Oil remains above $100 a barrel, stoking inflation fears.
Segments of the altcoin market were hit harder on Friday, with the likes of ETHFI losing 6% since midnight. WLD, WIF, SEI and FET all lost between 3.6% and 4.7%.
Positioning of derivative products
- Long bets on crypto futures, or bullish positions on the direction of the market, were hit hardest by liquidations over the past 24 hours, with nearly $300 million liquidated, compared to just $50 million in short positions.
- This is the fifth time in 10 days that long positions have approached this punishing level, an indication that traders were primarily positioned for the war in Iran to result in higher prices that failed to materialize.
- The price of XRP fell more than 2.5% in 24 hours, while futures open interest increased 2% to 1.95 billion XRP, the highest level since February 2.
- This combination represents renewed investor interest in shorting a falling market. Negative cumulative volume delta and sub-zero funding rates suggest the same thing.
- Futures contracts linked to Bitcoin, Solana, Dogecoin and BNB displayed a bearish XRP-like profile.
- Memecoin SHIB has the largest negative open interest-adjusted cumulative volume delta among major tokens, signaling aggressive de-risking, or shorting, by traders.
- Canton Network’s CC token stood out with positive funding rates and increased forward OIs, both signaling growing demand for bullish exposure.
- Bitcoin and Ether’s 30-day implied volatility indices, BVIV and EVIV, continued to decline despite weak spot prices, suggesting traders are not yet panicking and expecting a turbulent sell-off.
- On Deribit, Bitcoin options worth more than $15 billion expired early Friday. Thus, the supposed price magnet tied to the $75,000 expiration is no longer valid, opening the door for deeper declines amid a deteriorating macroeconomic outlook.
- Bitcoin and Ether puts are again trading at a 6-8 volatility premium over calls for all expirations as shown by the risk reversal. This indicates continued demand for downside protection.
Symbolic discussion
- The altcoin market showed its fragility again on Friday, unable to hold on to key support levels in a low-liquidity trading environment.
- The CoinDesk Computing Select Index (CPUS) was the worst-performing benchmark, falling 2.3%, while the Bitcoin-dominated CoinDesk 20 (CD20) fell 1.2%.
- ONDO is a token that has resisted the downtrend, which rose after Ondo Finance, an asset management company, said it agreed to tokenize five Franklin Templeton exchange-traded funds (ETFs) and integrate them into the Ondo chain.
- The token is up more than 8% in the past 24 hours, although it has given back some of those gains since midnight UTC.
- The average relative strength index (RSI) of all crypto tokens remains neutral despite the sell-off, suggesting further declines are likely on Friday.
