Crypto market shows signs of strength Tuesday with bitcoin standing at $76,500, a gain of approximately 1% since midnight UTC.
The price climbed to around $77,000 as of 9:45 a.m. before encountering a wave of spot sellers, who are likely protecting a possible breakout above Friday’s high of $78,300.
Ether (ETH) is lagging Bitcoin, rising just 0.3% to $2,320, as investors remain cautious about altcoins following the $290 million exploit on KelpDAO over the weekend.
Price developments remain dictated by the war in Iran, with the US vice-president due to travel to Pakistan for peace negotiations. A resolution is expected to lower oil prices, helping to boost risk assets that have been inversely correlated since the start of the war.
U.S. stock index futures rose, demonstrating a return to risk sentiment.
Positioning of derivative products
- The long-short ratio of the cryptocurrency futures market is 50.68%, indicating an almost equal split between bullish and bearish positions. In other words, traders are largely undecided about which direction the market’s next move will take.
- Over the past 24 hours, major tokens such as BTC, SOL, HYPE, and BNB added 1-3% to open interest (OI) futures, a sign of capital inflows. ETH, DOGE, and ZEC saw slight declines in OI.
- Open interest for AAVE futures reached a record 3.59 million tokens. At the same time, the OI-adjusted cumulative volume delta has become negative – indicating that sell orders are dominating and pushing bids – while funding rates remain near zero. Overall, the pattern indicates a slight bearish bias.
- Funding rates for Bitcoin and Ether remain negative, suggesting a bias toward short positions. This constant bearish environment creates potential for a short squeeze. This is a scenario in which price resilience causes bears to abandon their bets en masse, thereby reinforcing the bullish momentum in the spot price.
- On the CME, BTC futures activity continues to calm down, even as exchange-traded funds rake in millions. This combination indicates that entries into ETFs are primarily bullish directional plays rather than arbitrage bets involving a short position in BTC futures versus the long position of the ETF.
- On Deribit, BTC and ETH puts continue to trade at a premium to calls, reflecting downside concerns.
- Speaking of block flows (large transactions executed over-the-counter), BTC straddles and chokes cumulatively represent over 50% of activity over the past 24 hours.
Symbolic discussion
- The altcoin market is still reacting to the weekend’s $290 million exploit on KelpDAO with decentralized finance (DeFi) tokens ethena (ENA), etherfi (ETHFI), and jupiter (JUP) all posting losses over the past 24 hours despite slightly recovering since midnight UTC.
- The CoinDesk Memecoin Index (CDMEME) was the worst performing benchmark on Tuesday, losing 0.24% while the Bitcoin-dominated CoinDesk 20 (CD20) was up 0.65%.
- The altcoin market is showing indecision, with the CoinDesk 80 (CD80) remaining stable during the Asian and European sessions.
- AAVE is starting to recoup some of its weekend losses after a 22% drop, adding 2.6% despite widespread negative sentiment in the DeFi sector.
- CoinMarketCap’s “Altcoin Season” indicator is at 39/100, up from the weekend low of 34/100, but still demonstrating investors’ preference for bitcoin over altcoins.
