Crypto markets rallied on Wednesday as oil momentarily fell below $100 a barrel after US President Donald Trump said the war in Iran would end in “two to three weeks.”
Bitcoin is trading at $68,500 after rising 0.4% since midnight UTC and 3.1% over the past 24 hours, while ether (ETH) is back at $2,130 after a brief dip below $2,000 last week.
The broader crypto market remains in a downtrend since October, although sentiment has changed slightly following a period of consolidation between $62,500 and $75,000 since early February.
A selection of altcoins have performed particularly well, including algorand (ALGO), which is up 22% in the past 24 hours as it rebounds from oversold territory.
Positioning of derivative products
- The cryptocurrency futures market appears to be jittering rather than building clear directional positions, as trading volumes increased 23% to $210 million in the past 24 hours, while open interest remained broadly stable at around $106 billion.
- Open interest in major USD and USDT-denominated futures contracts has clearly deviated from BTC’s rally from the weekend low around $65,000. This suggests that the rebound is not due to significant accumulation of leveraged positions, but rather spot demand or short covering, indicating a lack of strong conviction behind this move.
- Ether’s OI rose slightly alongside its spot price, signaling participation from leveraged traders.
- ETH and ZEC stand out as major coins with positive OI-adjusted CVD and funding rate. This combination indicates aggressive bidding in the futures market, with traders actively opening long positions and paying a premium to maintain them.
- The market for ADA, XMR, BCH and SHIB suggests otherwise.
- The Bitcoin and Ether implied volatility indices continue to present a calm picture.
- On Deribit, risk reversals continue to show a bias for BTC and ETH puts, which provide protection against price declines. The downtrend is slightly more pronounced in BTC options.
Symbolic discussion
- The CoinDesk Computing Select Index (CPUS) was the best-performing benchmark on Wednesday, up 2.7% since midnight UTC, while the CoinDesk Smart Contract Platform Select Capped Index (SCPXC) and the DeFi Select Index (DFX) are up 1.5% each.
- Bitcoin and dominants CoinDesk 5 (CD5) and CoinDesk 20 (CD20) rose 0.35% and 0.69%, respectively, indicating underperformance compared to the broader altcoin market.
- Algorand (ALGO) led the market’s gains on Wednesday, but it was closely followed by decentralized finance (DeFi) tokens MORPHO and JUP, which posted double-digit gains.
- A disproportionate increase in open interest for assets like ETH and ZEC suggests that the recent move was supported by leverage rather than spot purchases, which could translate into news contrary to Trump’s statement released this week.
