The biggest cryptocurrencies remained under pressure for a fourth straight day, with bitcoin falling 2.5% in 24 hours to just below $62,400.
It’s not alone. The CoinDesk 20 Index (CD20) fell 3.3%, with Ether (ETH), XRP (XRP) and Solana (SOL) all lower. The CoinDesk Smart Contract Platform Select Capped Index fell 4%, closely followed by the CoinDesk 80 and CoinDesk DeFi Select Indexes.
Concerns over Strategy (MSTR), the Bitcoin treasury company led by Michael Saylor, continue to dominate market sentiment, with particular focus on its dividend-paying preferred stock, STRC.
“Strategy, the largest publicly traded BTC holder, has seen its STRC preference collapse below par, and the market is now openly assessing how much it will need to sell coins to defend the structure,” Marex analysts said.
“Add in five straight months of BTC trading below its estimated production cost of $78,000, quietly forcing weaker miners to capitulate, and you get two real sellers who weren’t in frame a week ago,” they added.
Positioning of derivative products
- The bulls continue to bleed as the market wilts following Wednesday’s hawkish Fed meeting. Over the past 24 hours, more than $450 million in leveraged bets have been liquidated. As has been the case since the meeting, most are long positions.
- Open interest (OI) on Bitcoin and Ether futures remained largely unchanged over the past 24 hours. SOL futures OI increased to over 70 million tokens, just below the June 5 record of 71.57 million. In other words, demand for leverage remains near all-time highs, suggesting outsized volatility.
- The same goes for XRP, where OI futures are at their highest level since October last year.
- Looking at the cumulative volume delta, most of the top 25 tokens, except TRX and LAB, are showing negative OI-adjusted CVD over the past 24 hours. This is a sign that sellers are trading on market orders, driving the price action, as opposed to passive limit orders. It’s been the same playbook since at least Wednesday.
- Funding rates for most tokens remain stable or even negative, indicating bearish sentiment. ADA, XLM, and BCH funding rates fell to between minus 20% and minus 30%.
- In the Bitcoin options market, traders are increasing the size of put options, preparing for a potential decline to $52,000 or less in the coming weeks.
- Bearish sentiment is also evident in the delta 25 biases, which show that one-week puts are trading with a volatility premium of 10% or more.
Symbolic discussion
- Need proof of the frenzy of sentiment towards AI? Meet the LAB Token, the native cryptocurrency of the LAB Terminal, which is a browser-based and extension-accessible platform for high-performance trade execution. Its main feature: AI-based search and trade routing to minimize slippage.
- LAB gained 57% in seven days, a staggering rise compared to the malaise in the market as a whole.
- The outperformance doesn’t stop there: the token has surged 92% this month, following gains of 900% in May, 250% in April and 78% in March. Talk about a bull market.
- During the same period, bitcoin ricocheted from $68,000 to $82,000 and then back to $63,000.
- Although LAB’s performance is impressive, there is no apparent reason for this. And it’s not without controversy.
- Blockchain investigation expert ZachXBT recently highlighted that insiders are believed to own 95% of the token supply. He said they used four methods simultaneously to attract retail investors. These include high-interest over-the-counter loans with promotional terms, unilateral extensions of the vesting period, delayed or withheld market rewards, and undisclosed market-making transactions.
- As the old saying goes: all that glitters is not gold.
