The crypto market is on the verge of a major price breakout after experiencing one of its worst weeks since July 2024.
Bitcoin which is currently trading around $62,500, has lost more than 14.5% since midnight UTC Monday morning, while ether (ETH) has plunged more than 17%, falling 5.5% on Friday alone.
Ether, the second-largest cryptocurrency, is now at its lowest level since April 2025, when it rebounded to $1,420 before rallying to record highs over the next four months. A break below this level would take it back to 2022 bear market levels, when it falls below $900.
The broader altcoin market also suffered heavy losses this week. One of the worst performers on Friday was zcash (ZEC), which fell more than 30% after a security researcher discovered an exploit that would have allowed “unlimited” tokens to be created in its protected pool.
Several catalysts are behind this week’s slide. Strategy (MSTR) Executive Chairman Michael Saylor attributed it to capital turnover in light of a series of artificial intelligence IPOs in the United States, while on-chain analysts point to a lack of spot crypto volume.
CryptoQuant notes that spot trading volume fell to $679 billion in April, the lowest monthly level since October 2023, indicating a lack of demand.
Positioning of derivative products
- BTC derivatives positioning went from slightly improving to clearly deleveraging this week. Open interest fell 15% to $17 billion as funding rates moved from negative to stable at several sites.
- At Deribit, the rate fell to -15% annualized, a notable reversal from the previous positive regime. The three-month annualized base fell to 2.7% from 2.9% last week, confirming a decline in institutional investors’ appetite for risk.
- Options positioning has become clearly defensive: put/call volume has shifted to a 50/50 split over the past 24 hours, losing the previous call tilt, while the 25-week delta skew has more than doubled from 13% a week ago to 27%. This signals a sharp escalation in demand for downside protection.
- Initial implied volatility (DVOL) rose further to 47, confirming sustained supply that aligns with broader derivatives deleveraging.
- Data from Coinglass shows $1.2 billion in liquidations over 24 hours, with a 76-24 split between long and short positions. Bitcoin ($364 million), Ether ($291 million) and Zcash ($107 million) were the leaders in terms of notional liquidations.
- Binance’s liquidation heatmap shows $60,900 as the base BTC liquidation level to watch, in case of a price decline.
Symbolic discussion
- Zcash’s (ZEC) plight on Friday has cast doubt on privacy coins, with Monero (XMR) losing 12% since midnight UTC and Dash (DASH) falling 9%.
- ZEC’s losses were compounded by BitMEX founder Arthur Hayes, who said on X that his company had sold its entire token allocation.
- There were also heavy losses for which fell more than 10% after project founder Charles Hoskinson said he was “taking a break” after warning of ecosystem failures.
- AI tokens lost momentum early in the week as FET, NEAR, and TAO fell 4-6% despite outperforming the rest of the market on Monday.
- One reason altcoin holders are hopeful is the fact that the average relative strength index (RSI) of all cryptocurrency pairs is in “oversold” territory, suggesting a relief bounce could be in store this weekend.
