Volatility returned to crypto markets on Monday as Bitcoin rose as high as $79,480 before quickly dropping back to $77,800.
The move began around 11:00 p.m. UTC with the opening of US stock and Bitcoin CME futures, a time that often sees increased volatility.
At 05:30 UTC, the price began to decline after failing to break above the $80,000 level, falling 2% in an hour.
The drop came as oil hit its highest level since the U.S.-Iran ceasefire began. Brent crude is trading at $107 a barrel after US President Donald Trump on Saturday canceled plans to send US officials for talks in Pakistan.
Ether (ETH) recently traded around $2,320 after losing 2.2% since midnight UTC, underperforming bitcoin, which is down 1.1%, but not falling as precipitously as several altcoins.
Positioning of derivative products
- Nearly $300 million in crypto futures bets were liquidated in the past 24 hours. Most of these were bearish short plays, which were likely hit hardest by the cryptocurrency’s brief rally to near $79,500.
- Open interest (OI) on XRP futures increased by almost 2.5% in 24 hours. This is the largest increase among major tokens including Bitcoin, Ether, and Solana (SOL). OI hit a one-week high of 1.82 billion XRP alongside negative perpetual forward funding rates and OI-adjusted cumulative volume delta. This combination paints a bearish picture, consistent with the bitcoin and ether markets.
- Analysts, however, said that BTC’s persistent negative funding rates are primarily due to institutions hedging their bullish exposure in related markets and not representing a purely bearish bet on the market.
- Other notable gainers in OI over the past 24 hours include HBAR, CC, XLM, and HYPE.
- SUI records the most negative CVD, suggesting aggressive and sustained selling via market orders. A Sui-based DeFi protocol named Scallop was hacked earlier today, and the perpetrators made off with around 150,000 SUI tokens worth just over $140,000.
- The 30-day implied volatility indices for Bitcoin and Ether extended their declines, painting a picture of market calm that supports the continued rise in prices of both assets. That’s consistent with the recent decline in Wall Street’s VIX index, a gauge of the S&P 500 index, and with record highs in other key metrics, including the Nasdaq.
- On Deribit, Bitcoin and Ether options continue to show a bias towards put options across all time frames. Ether options expiring next December and March are significantly less bearish than their Bitcoin counterparts.
- Bitcoin’s $80,000 strike call option is the most popular on Deribit, with notional open interest of over $1.5 billion. Dealer gamma here is positive, implying that dealers (market makers) could sell on a potential breakout above this level and similarly buy the dip, thereby stopping price volatility.
- Speaking of flows, Laser Digital said investors favor risk reversals over outright puts. This means that traders prefer options strategies that take advantage of price fluctuations and differences in how options are priced at different strike levels.
Symbolic discussion
- While the market as a whole was volatile on Monday, the altcoin sector was hit the hardest during the 05:30 UTC sell-off.
- Liquid recovery token Lido (LDO) led the losses, returning all of Sunday’s gains to around 17%.
- The bitcoin-rich CoinDesk 20 Index (CD20) is down 1.5% since midnight UTC, while the DeFi Select Index (DFX) lost 2.3%, with only the Smart Contract Platform Select Index (SCPX) performing worse, down 2.5%.
- A handful of tokens managed to avoid the sell-off, including PENGU, JUP, and CHZ, which rose 9.1%, 4%, and 3.1%, respectively.
- CoinMarketCap’s “Altcoin Season” indicator sits at a neutral 39/100, unchanged from last week and well below last month’s high of 51/100.
