The crypto market is poised for a major breakthrough with Bitcoin trading at $78,000, the level it failed to breach on Friday and a price it has not exceeded since January.
A break above this level would trigger bullish momentum up to $80,000, as $180 million in futures positions are expected to be liquidated between $77,000 and $78,000, according to CoinGlass’ liquidation heatmap.
However, there is also a long position of $71 million that will be liquidated if the price fails to rise and falls back below $77,300, creating a defensive trading environment on both sides.
The market is rising after US President Donald Trump extended the ceasefire in Iran, saying the country’s government was “seriously fractured.”
Nasdaq 100 and S&P 500 futures rose 0.77% and 0.6%, respectively, since midnight UTC following the announcement, suggesting an improvement in overall market sentiment.
Positioning of derivative products
- BTC’s breakout to $78,000 caught bears off guard, leading to $286 million in market-wide short liquidations on derivatives exchanges. Long positions, or bull plays, saw liquidations of just $132 million.
- Yet overall crypto futures open interest (OI) increased by over 4% to $126 billion in 24 hours. Notably, OI increased across major tokens including bitcoin and ether (ETH), outpacing spot price gains, indicating new capital inflows and growing demand for leverage.
- Funding rates have turned positive for most tokens, including BTC, indicating a new bias towards bullish bets. The 24-hour cumulative volume delta also paints the same picture.
- The M token stands out for annualized funding rates above 200%, signaling an overheated market filled with bullish bets. Meanwhile, the HYPE and XML markets display a bias towards bearish short plays.
- Generally speaking, crypto futures activity suggests opportunities for additional gains in the market. The 30-day implied volatility indices for Bitcoin and Ether, which remain under pressure, point to market calm.
- On Deribit, Bitcoin and Ether risk reversals continue to print negative values across all time frames. This is a sign of the wealth of protective puts versus calls.
- Block flows exhibited investor bias for call ratio spreads, a strategy used by traders to profit from a moderately bullish, sideways, or slightly rising market. Traders also looked for bitcoin and ether straddles, a volatility strategy.
Symbolic discussion
- The altcoin market was also buoyant on Wednesday, with all major CoinDesk indices posting gains of at least 1.5% since midnight UTC.
- The CoinDesk MemeCoin Index (CDMEME) was the best performer, up 3.4%, with one person turning $575 into over $1 million on the recently released ASTEROID token.
- Popular memecoins TRUMP and DOGE added 6% and 3.8%, respectively, reflecting broader optimism in the sector.
- There was also a surge in privacy coins DASH and XMR, which both gained 6-7% over the past 24 hours before declining slightly since midnight.
- CoinDesk’s overnight rate (CDOR) for USDC has reached its highest level since 2024, hitting 15%. CDOR measures stablecoin lending and borrowing activity on the Aave platform, which spiked following the weekend’s $290 million exploit on KelpDAO. A high interest rate reflects high demand.
