Bitcoin held above $63,000 on Monday, looking to build on a 4% rally on Sunday spurred by Strategy (MSTR) Executive Chairman Michael Saylor hinting at further buying of the largest cryptocurrency. Saylor’s position is a signal that markets are taking seriously given the company’s history of aggressive accumulation.
The stability of Bitcoin is breathing new life into the less followed corners of the market. Audiera’s BEAT token surged 78% in the past 24 hours and Siren’s SIREN added 33%, making them the two best performing coins among the top 100 by market cap. Audiera is a Web3 rhythm gaming and entertainment platform built on BNB Chain that treats AI characters and virtual idols as economic participants. Siren is also a Web3 AI project based on BNB. The catalysts for these movements are unclear.
The broader market recovery depends on what Bitcoin does next. It is currently trading near its 200-week simple moving average, a level that has historically acted as long-term support and a key battleground between bulls and bears at major turning points in the cycle.
“The sentiment index dropped to 8, once again showing single-digit values on Monday, after a two-month hiatus and unsuccessful attempts to consolidate into positive territory. Judging by the momentum near Bitcoin’s 200-week moving average and the sentiment index, the situation resembles that of mid-2022,” said Alex Kuptsikevich, chief market analyst at FxPro in an email.
“Under similar conditions at the time, the bearish momentum weakened, but a real reversal did not occur until several months later,” he wrote.
Positioning of derivative products
- Bitcoin futures open interest collapsed to 716,000 BTC from a record 901,000 BTC just four days ago, a stark illustration of how brutally last week’s price crash wiped out leveraged positions in the market.
- One silver lining: The decline in open positions suggests traders largely did not invest in new shorts during the sell-off, meaning the move was driven by forced long liquidations rather than aggressive bearish conviction.
- Ether (ETH) tells a similar story. Open interest returned to 14.58 million ETH from 15.98 million ETH late last month.
- is the highlight of the last 24 hours. Open interest surged more than 13% in the past 24 hours to 1.64 million BCH, the highest level since July 2023, although its price resisted the recovery with an 8.3% decline. A rise in open interest in the face of falling prices typically signals an accumulation of short selling, and BCH’s negative 24-hour cumulative volume delta confirms this: traders are actively shorting at market prices rather than placing limit orders. The pattern suggests continued bearish sentiment and the potential for further losses.
- Canton Network’s CC token is also seeing an increase in open interest.
- On the volatility front, the stabilization of bitcoin manifests itself in so-called fear indicators. The BVIV 30-day annualized implied volatility index has retreated to 50% from a peak of nearly 59% on Friday, suggesting that acute stress is fading and conditions are favorable for at least some consolidation. Ether implied volatility has fallen from 75% to 69%.
- Sentiment in the options market has changed significantly. The five most actively traded instruments on Deribit in the past 24 hours are all calls, including a $170,000 strike expiring on December 25. It is a safe bet that bitcoin will exceed this level before the end of the year. These out-of-the-money calls work like cheap lottery tickets: a small premium, high odds, and a huge payoff if the trade goes well.
- A risk factor remains. The broker’s gamma profile around $60,000 continues to indicate a setup in which market makers may be forced to trade in the direction of price movements to rebalance their books, a dynamic that could amplify swings in either direction.
Symbolic discussion
- Zcash (ZEC) rebounded 45% from last week’s low after developers proposed a fix for a critical counterfeiting bug in its privacy-focused Orchard pool.
- Ironwood’s proposal would move users to a new, repaired privacy pool and allow anyone running Zcash software to verify that no more than the correct amount of ZEC exists.
- As coins migrate out of the old pool, any counterfeit ZEC would either be exposed or blocked and destroyed, potentially revealing whether the flaw has already been exploited, although developers say abuse is unlikely.
- Elsewhere, Tether’s dollar-pegged stablecoin USDT briefly overtook ether (ETH) in market capitalization over the weekend, as the latter fell alongside the broader market.
- Ether slipped from $2,000 to just over $1,500 from Friday to Sunday, bringing it to a market cap of $183 billion, compared to USDT’s $186 billion. The token has since recovered, bringing it back above USDT, although it remains well below bitcoin. This is the $1.2 trillion level.
