The crypto market is at a critical point on Wednesday, with bitcoin The price is close to the $75,000 support level after failing to breach the $78,000 level on Tuesday.
The Ether (ETH) chart tells a similar story. The second-largest cryptocurrency by market cap was rejected at $2,150 on Tuesday and fell towards the $2,000 support level. It rebounded from $2,050 at 05:30 UTC on Wednesday and was recently trading around $2,080.
AI tokens RENDER, FET, and NEAR have given up much of their gains from Tuesday’s rally, falling between 1% and 3% since midnight UTC.
The U.S. stock market continued its move away from crypto on Wednesday, with S&P 500 and Nasdaq 100 index futures both hitting record highs after adding around 0.3%.
Importantly, Bitcoin is now below Bitmine (BMNR) Chairman Tom Lee’s line at $76,000, which he said would signal the end of a bear market if BTC ended the month above that level.
Positioning of derivative products
- Crypto futures volume jumped 54% to $201 billion in 24 hours, while liquidations jumped 87%. The massive percentage gains largely reflect the market waking up after a long lull during the U.S. holidays rather than a structural change in activity levels.
- Bitcoin fell 1% in the last 24 hours as open interest climbed to 740,000 BTC from 704,000 BTC, a combination that generally confirms a downward price trend. The negative 24-hour cumulative volume delta (CVD) shows traders are selling aggressively via market orders while funding rates remain neutral.
- Ether open interest reached an all-time high of 15.57 million ETH alongside a negative CVD. Traders may sell contracts short in anticipation of a greater price loss. This follows a technical break of the uptrend line that has supported the market since February, opening the door to deeper losses.
- Open interest for ZEC futures fell for a third day to 2.30 million tokens as the price slipped towards $564. The simultaneous decline in price and open interest suggests that previous bullish bets are being closed rather than new short positions being opened.
- Bitcoin’s 30-day implied volatility index (BVIV) rose nearly 3% to 37.35%, marking its first gain in 10 days and a rebound from yearly lows. A continued rise would indicate that the market is finally paying to protect itself against a possible price fade.
- Data from Deribit shows that the September $55,000 put is the most traded contract in the last 24 hours. This represents a bet that Bitcoin will fall significantly by the end of this month. Most of the activity focused on downside protection during various strikes between $70,000 and $76,000.
Symbolic discussion
- The CoinDesk Computing Select Index (CPUS) has fallen 2.2% since midnight UTC following losses in the AI sector. The DeFI Select Index (DFX) also struggled on Tuesday, losing 1.5%.
- A positive point is hyperliquid (HYPE). The perpetual exchange’s native token hit a new all-time high this week and continues to show strength on Wednesday, up 5.5% since midnight UTC.
- There was also a notable gain for monero (XMR), up 5% on Wednesday as it retested Monday’s high around $400.
- CoinMarketCap’s “Altcoin Season” indicator also increased to 36/100, demonstrating the relative strength of a few select altcoins despite broader market weakness.
